The consulting firm that Chrysler LLC blamed for its failure to find overseas sources of low-cost parts has fired back against Chrysler in court.
Accenture LLP says the sourcing effort, called Project Magellan, failed for several reasons, some of them Chrysler's own doing.
Chrysler sued Accenture last year, claiming the automaker paid at least $7.7 million for consulting services on the project. Yet Chrysler says Accenture failed to obtain any of the $900 million in expected savings from buying in lower-cost countries.
But Accenture's response, filed this month, contends that Chrysler "intentionally interfered with and frustrated Accenture's attempts to perform the parties' agreements" to develop Project Magellan.
Accenture also claims that it was denied sufficient resources, that it was forced to use an improper bid-letting system and that Chrysler failed to deliver on other promises.
The two companies have a long-standing relationship. Accenture is one of the world's largest consulting firms, spun out of the former Arthur Andersen accounting firm.
Chrysler spokesman Mike Palese said Accenture fraudulently represented that it could expand Chrysler's overseas parts reach in low cost-countries. The failure to do so cost the automaker hundreds of millions of dollars in cost savings, he says.
Chrysler filed suit Aug. 25 in Oakland County Circuit Court in Michigan. The company claimed it obtained virtually no savings from Accenture's efforts to help it buy parts in countries such as China and India. Chrysler says Accenture demonstrated almost no experience in identifying suppliers in low-cost countries.
An Accenture spokesman says Chrysler paid for services in full without claiming Accenture failed to meet its contractual obligations. Accenture also claims Chrysler failed to mitigate alleged damages by not halting Project Magellan until September 2007.
The project was launched by former Chrysler purchasing boss Peter Rosenfeld. John Campi, who became the company's top purchasing executive in early 2008, killed the project. Campi resigned in December.