Good move, Chrysler
Chrysler Group's plan to award more no-bid contracts to favored suppliers is a bold stroke and a necessary step in the company's ability to develop loyalty among its 3,000 suppliers.
Bringing key suppliers in early on product-development projects and de-emphasizing competitive bidding should build trust with suppliers, give Chrysler access to top technology and lower product costs while improving quality.
Chrysler had excellent relations with its suppliers in the late 1980s and early 1990s, before Daimler took over. Since then Chrysler's supplier relations have flagged, most recently because suppliers were uncertain about the company's fate.
The no-bid plan will go a long way to reassure suppliers that Chrysler is making the right moves to survive and thrive.