Chrysler Sourcing Too ‘NAFTA-Centric’
By Tom Murphy WardsAuto.com, Jan 16, 2008 1:47 PM

DETROIT – Chrysler LLC’s new global purchasing chief wants financially healthy parts producers and will look beyond North American shores for high-quality, cost-competitive components, as well as vehicle-engineering services.

Campi became Chrysler’s executive vice president-procurement Jan. 3 after spending more than 35 years in sourcing, some of it in automotive.

He spent the last three years at Home Depot Inc. working under Robert Nardelli, who was named Chrysler CEO in August.

Campi also worked in purchasing previously at General Electric Corp., DuPont and Federal-Mogul Corp., and for a while was a consultant for General Motors Corp. and Ford Motor Co.

On the sidelines at the North American International Auto Show here, Campi tells Ward’s he is beginning to meet Chrysler’s suppliers and plans to “spend a lot of time” talking with parts producers.

Asked whether suppliers should anticipate the current cost-reduction emphasis to change during his tenure at Chrysler, Campi says pressure is universal across the auto industry and won’t let up.

“I’ve always found the best cost-reduction programs make suppliers more profitable,” Campi says. “I have to understand, as does everyone in my organization, that unhealthy suppliers will kill our business. We must find ways to collaborate and work with our supply base wherever possible.”

John Campi became Chrysler’s executive vice president-procurement Jan. 3.

Campi also says he sees Chrysler as too dependent on parts producers located within North America. “It’s too NAFTA-centric, if you will,” he says. “We have virtually nothing that comes from off-shore.”

As India and other developing nations educate a growing number of young, capable engineers, Campi says Chrysler must tap into that vast resource.

“To me, that’s almost a criminal act to not have done that, because we’re behind the curve” while other companies cultivate that relationship more aggressively, he says.

“I’m going to encourage sourcing of parts where we can have equal to, or higher quality than, we have with the right kind of delivery performance and get it at the best possible total cost.”

Sourcing parts from China or other low-cost sources in Asia presents unique logistical challenges, but they can be overcome.

Related Stories

Chrysler Names Global Alliance Chief Chrysler’s Boag: ‘We’re guilty’ OEMs Urge Supplier Transparency

“Yes, I absolutely will go to Asia if, in fact, I can deliver the kind of product I’m talking about on a cost-effective basis,” Campi says.

Before joining Chrysler, Campi says he already had learned much about risk and the other variables that impact purchasing for a large organization.

“Risk takes on lots of meanings,” he says. “Ask 100 people to define risk and they’ll give you a generic definition. But when it comes to procurement and sourcing activities, you have to consider lots of variables.

“Almost every facet of the business is impacted by a risk assessment. What is the risk to us to be so domestically oriented in our sourcing that we have no division relative to the sourcing activity in an emerging market?”

Campi views sourcing as “kind of a leading edge of business development,” and does not consider himself an expert in sourcing.

“I am, however, an expert in cost management,” he says. “That’s the one thing I truly believe that I know inside out. I spent 40 years in it. At Home Depot, Campi oversaw a $60 billion purchasing budget, most of it dedicated to retail product.

“But I’ve sourced just about every kind of component, whether in an aircraft engine or turbine, or for DuPont in some of the businesses they run,” he says.

Campi replaces Simon Boag, who was Chrysler’s short-term purchasing chief until his recent assignment to the new post of executive vice president-global alliance operations.

tmurphy@wardsauto.com