Chrysler CPO wants "fierce" collaboration with automaker's supply base

Campi vows to rebuild relationships with automotive suppliers

By Tom Stundza -- Purchasing, 9/11/2008

John Campi, Chrysler's chief procurement officer for global sourcing, isn't happy with the cost of raw materials these days but told a recent auto industry conference that the Michigan automaker will do what it can to manage cost inflation until the commodity bubble bursts. More importantly, he says the company will work around cost inflation issues to rebuild partnerships with its suppliers of steel, nonferrous metals and other materials.

"All of us are kidding ourselves if we think there's a magic formula to solve the spike in pricing of steel, base metals and other raw materials," he told the International Congress of the Automotive Industry in Mexico City in July. "The North American auto industry, no matter how big a buyer of these materials it is, can't provide the leverage points to change demand or pricing these days."

Commodity price inflation has hit double-digit growth this year, doubling the cost of steel mill products used top make motor vehicles. Campi, who has been in the job for less than a year, oversees a Chrysler procurement organization that sources $40 billion annually. "There are many things I wish to change," he said in his speech, adding that "Chrysler never will give up quality to source a part to a lower-cost footprint."

But that doesn't mean that he plans to pull back on sourcing in Asia, Mexico, South America or Europe. In a report on the conference in the Automotive News newspaper, Campi says that "there's no issue of quality in China or anywhere if we pay attention and respect the environment we are in."

So, the best thing that Chrysler's supply chain can do "is to repair its relationship with its suppliers" and "rebuild the trust between us and our suppliers that we have managed to destroy" under previous managements. In a discussion with reporters on the sidelines of the meeting, Campi said that the fault lies in Auburn Hills for previous supply-base mismanagement. That's why he adds: "I'm dedicated to correcting this issue. I want fierce collaboration with our supply base."

In early August, for example, Chrysler's Diversity Supplier Development group recognized top suppliers who themselves worked with qualified minority suppliers to support the core values of the auto company's global sourcing organization.

IBM of Armonk, N.Y., was named 2008 Corporation of the Year for participating in 10 regional minority business development councils and employing a full-time global supplier diversity program director to lead a team of eight local supplier diversity program managers, as well as four additional employees supporting global initiatives. The efforts of these individuals has helped IBM to achieve their Chrysler minority spend objectives for seven consecutive years.

The Bartech Group talent acquisition and management firm was cited as the 2008 Minority Business Enterprise (MBE) of the Year. The Livonia, Mich., minority-owned firm spent $27 million with Tier 1 minority companies in 2007, a 300% improvement from the previous year's minority spending.