Chrysler Corp. has turned up the heat on suppliers. The automaker raised its suppliers' total cost-cutting targets to $2 billion annually, up from $1.5 billion. Jonathan Maples, Chrysler's executive director for supplier management, spoke last month with Staff Reporter John Couretas at a meeting of Canada's Automotive Parts Manufacturers' Association in Hamilton, Ontario. Edited excerpts:
How can you be sure that there aren't some Chrysler purchasing people reverting to the old confrontational style to get their jobs done?
It's how we work the process. We work the process instead of just the results. We expect people to communicate to us when those things happen. It's very foreign to our culture. We're trying to stay true to our commitment of being our suppliers' best customers. And still drive the waste out of the system ruthlessly, without being ruthless in our relationship to our supplier partners.
But there's so much pressure to cut costs.
The fact that our shareholders put pressure on the OEMs to maintain superior financial performance puts a lot of pressure on the system. I think there's a balance there in how you hold people accountable and responsible and still have teeth in the program. You know we aren't running a philanthropy. What we want to do is make sure we conduct our business in a fair manner, that we treat our suppliers truly as partners. Unless you do that, you won't get the investment in the future, you won't attract the best people.
Can you foresee a time when Chrysler might have to modify its approach, and maybe depend more on competitive bidding?
That's not what we would do. Not that we won't hold people accountable for their performance. We may shift business away from companies that don't hit our quality objectives and don't hit our cost objectives. But we won't do it in a manner that is just strictly competitive bidding for the sake of driving an economic wedge into the relationship. It takes more work to drive the waste out of the system instead of trying to beat someone up. It's a little more blood, sweat and commitment to do it that way.
You can remember a time at Chrysler when supplier management meant simply clobbering someone for a price cut ...
And it wasn't a fun way to do business. We've been there.