Chrysler pledges better relations with suppliers, OEMs
Chrysler Groups CEO-elect Tom LaSorda says the company will re-define its relationships with key suppliers. In a speech at the Auto Industry Action Group (AIAG) AutoTech Conference, Mr. LaSorda, who will take over as CEO and president, September 1, announced that Chrysler will take the unique approach of building long-term relationships with original equipment manufacturers (OEMs). He cited TRW and Iroquois Industries as Highly Integrated Partnership Organizations and examples of companies that will excel with this new model. The companies were awarded early involvement in product development for 2006 and 2007 Chrysler vehicles based on the companies performance. Early supplier integration will help reduce the need for wasteful late engineering changes, which hamper our efforts to meet quality and system cost targets, said Mr. LaSorda. Upstream supplier involvement also provides additional lead time to develop more innovative features and technology. This earlier sourcing reflects our efforts to form stronger partnerships with suppliers. Mr. LaSorda mentioned four hot buttons that will help suppliers better understand OEMs: low costs; high quality; fuel economy; and customer pleasing vehicle content like navigation systems and mp3 integration. He reinforced that these four issues are key to most automotive executives. Understanding this mindset is something that suppliers can do to help us work together more effectively. Mr. LaSorda said that both OEMs and suppliers are facing the same economic hurdles of high petroleum, resins, and steel costs, as well as the high cost of health care. The CEO-elect said that Chrysler Groups approach is to turn this economic pain into power by delivering high quality, innovative, and cost competitive products to customers. He went on to add that despite poor relationships with suppliers several years ago, he understand that relationships and communication are indispensable to survival.