They may not be the biggest among their competitors, or have the deepest funding, but minority- and women-owned businesses are a substantial part of US automakers' supply bases. In an effort to support businesses that tend to locate in the heart of America and often employ an otherwise disadvantaged population, the auto industry is setting the bar for doing business with this particular supply group.Ford has a goal of directing 10% of their annual supplier spend to socially or economically disadvantaged suppliers. Such suppliers represent 404 of their 6,800 suppliers. In 2009 they spent $2.7 billion with minority- and women-owned businesses and they will exceed that goal in 2010.
About half of that or 5% of GM's total spend is with minority- and women-owned businesses which make up over 10% of their supply base.
Chrysler leads them all with over 13% of their spend being directed to businesses owned by minorities and women.
All of this does not happen magically by running a spend report at the end of each year. These automakers have personnel and programs dedicated to nurturing and growing this unique supply group. However, when it comes to awarding contracts, there is no favoritism. These suppliers must compete and win the bids on their own.
For more information see: http://www.detnews.com/article/20100930/AUTO01/9300368/1148/Suppliers-owned-by-minorities--women-persevere
Sample Test Question: Task 1-F-3
Possible reasons to develop and implement a supplier diversity program include all of the following EXCEPT:
A) To be eligible to do business with the government
B) To enhance your company's competitive advantage
C) To offer charity in giving business to suppliers that would not otherwise qualify for a contract
D) To support local and global initiatives
