At Stellantis, supplier diversity a team effort

DETROIT — Dating back to the days of Chrysler Corp., Stellantis North America has spent close to $100 billion with suppliers owned by minorities, women and veterans since 1983 when it started its supplier diversity program.

The automaker built many of those relationships in person, but the COVID-19 pandemic forced it to change how it engaged with supplier prospects.

The in-person meetings that once were critical to establishing rapport have gone virtual. In addition, the health crisis yielded a new online gateway for diverse suppliers to get noticed at Stellantis. The automaker was formed after the January merger between Fiat Chrysler Automobiles and France's PSA Group.

The purchasing division's commitment to doing business with diverse suppliers is stronger than ever, and the company is surpassing its spending goals with them. Stellantis spent more than $6 billion with more than 200 diverse suppliers in 2020.

Bashar Cholagh, Gregory Hawkins, Scott Thiele, Teresa Thiele and Marvin Washington each have had a hand in diversity efforts within Stellantis' massive purchasing operation, and they are being collectively honored in Automotive News' inaugural Notable Champions of Diversity listing.

"Everyone internally is held to our procurement goal. This year it's 20 percent diverse spend," said Cholagh, senior manager of supplier diversity development. The target is "one out of every $5 goes to a diverse company, and we're exceeding that."

On top of the internal directive, the automaker ensures that its Tier 1 suppliers are upholding a similar standard with their own transactions. Stellantis expects up to 12.5 percent of the spending at its Tier 1 suppliers be sourced to certified minority, women and veteran-owned businesses.

If those suppliers miss their targets two years in a row, it could affect how Stellantis spends with that company moving forward, and it has to go on an improvement plan. This approach, Cholagh said, ensures that the suppliers Stellantis works with are aligned with its mission.

The networking and outreach that has been a staple of the manufacturer's supplier diversity and purchasing strategy for years continues even as the health crisis has reshaped the world around it.

The automaker's Matchmaker program, which brings together scores of diverse suppliers and executives from Stellantis and other companies each year, has taken on a new look. Traditionally, about 2,000 people would gather at Stellantis' U.S. headquarters in Auburn Hills, Mich., for the event, but that was no longer feasible given the pandemic.

This led to Stellantis partnering with the Original Equipment Suppliers Association to take Matchmaker online the past two years. The automaker says this setup allows diverse suppliers to have virtual exhibit spaces for networking, educational programming and one-on-one matchmaking meetings.

Cholagh believes this virtual format made it easier for smaller operations to get involved because they didn't have to incur travel expenses to attend. Plus, he said these suppliers didn't have to wait in lines to speak with clients and could engage them in chatrooms instead.

The 2021 event drew more than 160 exhibitors and 900 attendees. There were 100 Stellantis decision-makers on hand.

After the pandemic emerged, Stellantis cast a digital net to collect supplier candidates. It developed a Web portal where suppliers can register, share details about their capabilities and begin connecting with the automaker's purchasing unit.

"The team assesses you, and then we bring you in for a preliminary interview," Cholagh said. "If you feel like you're ready to do business with Stellantis, we bring you to the next step, which is the buyers and the buying teams and we really begin to try to find opportunities."

The ongoing push for diverse suppliers comes at a moment when the industry is looking for innovation in connected-vehicle technology, autonomous driving and electric vehicles. But the number of diverse suppliers in high-tech areas, especially electrification, is low.

Cholagh would like to see companies developing EV-related technologies, for example, form joint ventures with diverse suppliers to help them grow into the sector.

The joint-venture model has worked well in other parts of the business. Scott Thiele, who led global purchasing for FCA and now heads North America portfolio planning, said the seating supplier for the Ram 1500 is Detroit's Bridgewater Interiors — a joint venture with seating company Adient and Epsilon Technologies. The Black-owned company was formed in 1998 to manufacture seating for General Motors.

Stellantis is focused on finding diverse creators in the startup space. The automaker partnered with accelerator Plug and Play and the Michigan Minority Supplier Development Council in January 2020 to bring an innovation hub to Detroit.

"Plug and Play Detroit powered by AmplifyD" provides access to all technology startups, but Stellantis says there's an emphasis on those owned by women and minorities.

"We were not just trying to get these companies going, but we tried to focus on diversity at the same time and there's a couple of interesting ones that have come up looking at EV routing, looking at charging," Thiele said. "Those are spaces where the hurdle rate to get into the business is not so high, so I think those kinds of places are places where [minority business enterprises] can come in and really add some value. They're not mature areas at the moment, so they are places where everybody's looking for new companies to work with."

Stellantis is looking to aid suppliers even if they move beyond the auto space.

The automaker kicked off the pilot phase of the Stellantis-National Business League National Black Supplier Development Program in November. The initiative will provide businesses with virtual training and give them access to an online marketplace that the company says will build "a bridge between the public and private sectors to create substantive business opportunities for Black suppliers" across the U.S. and internationally. Teresa Thiele, director of aftermarket purchasing, global body and interior and North America operations — in addition to her roles in Stellantis' Middle Eastern Business Resource Group and as co-chairperson of its Women's Alliance Business Resource Group — coaches suppliers in the program. (She and Scott Thiele are married.) The program's project lead, Gregory Hawkins, is also chair of the automaker's Gay and Lesbian Alliance.

Stellantis will anchor the creation of this training and development portal over the next three years. It will open the portal to its own suppliers and then make it available to other automakers, the federal government and companies in the public and private sectors.

The National Business League was founded in 1900 by Booker T. Washington.

Areas of focus for the pilot companies include logistics, marketing and manufacturing EV charging stations. Another participant, One World Pharma, is owned by NBA Hall of Famer Isiah Thomas and is working to develop renewable hemp-based alternatives to plastics for use in vehicles.

Marvin Washington, global head of mechatronics and electronic modules purchasing and national lead for the new program, said it could develop into a feeder program for Stellantis. Hundreds of companies have applied and Stellantis is reviewing them.

The initial 13 companies will get a crash course over several months in topics such as brand creation, financial management and building capacity.

"We're really starting to try to get our arms around how best to grow the program so that more companies can be fed," Washington told Automotive News. "The needs that they have are in different spaces. Some are really in the infant stage and need a lot of guidance, and some just need connections."