Supplier relations in Detroit continue to take a beating, thanks to the OEM’s insistence that parts makers can simultaneously cut costs and deliver higher quality. And nowhere has that strategy been so fully embraced and/or embarrassingly revealed as a pipe dream than at Chrysler. Under the Cerburian fist of John “win-win proposition” Campi, Chrysler has squeezed suppliers into bankruptcy while continuing to rank at or near the bottom of most quality ratings. And now it seems the Campi-led attempts to squeeze money from nothing (and his chicks for free) have conjured-up yet another egg on the Pentastar’s face. Automotive News [sub] reports that Chrysler paid consulting firm Accenture “at least” $7.7m as part of its “Project Magellan” aimed at uncovering $900m in savings by identifying suppliers in India and China. But Chrysler “saw virtually no savings,” from the project. An enraged Campi is suing the Arthur Anderson spin-off, claiming “Accenture demonstrated virtually no experience in identifying low-cost-country suppliers for the automotive business and had no knowledge of the supply base in China or South America.” So why did Chrysler pay Accenture in full for services rendered? Since Campi took over after Project Magellan fell apart, he couldn’t answer that question. How about this one: Why should our tax money be used for low-interest loans to automakers to create U.S. jobs when these same automakers are so damn busy outsourcing jobs to Mexico, Canada, China, South America, etc.?
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One of the many common corporate sicknesses is the hiring of expensive consulting firms to do the work the company’s executives and managers should be doing for themselves. Most of these consulting firms are chock full of 20 something recent college graduates working 80 or more hours a week, but completely lacking the skills, experience and judgment to work smart. But, that is OK because these kids are paid less than a third of what they are billed to the client at … so rack up the hours!
Maybe that’s Chrysler’s new way to make money. Sue everybody and claim a lot of damages and attorney fees. Get paid a bunch to go away.
If they do it to enough companies I am sure they can make out like a bandit.
Personally, I am hoping this Chrysler LLC simply pisses off the wrong people one time too many, and the supplier in question (probably in some foreign country like China or India) simply says the equivalent of f-off, and shuts off the spigot.
It’ll be VERY hard for Chrysler LLC to sue them for breach of contract in courts across the world. Especially when said Chrysler LLC is the one which continually breaks their ends of the contracts by unilaterally paying less than agreed to.
Interesting how Chrysler sues at the drop of a hat and screams that they’ll not sanction any suppliers playing around with their supply lines or else (more extortion with menaces / lawsuit threats) …
But then 5 minutes later unilaterally breaks their end of a contract by declaring – we’ll pay you late, we’ll pay you less – and you’ll take it.
This Chrysler LLC needs to go away, and guess what?
Soon, it will.
Murphy’s law – first the a-holes will soak the US taxpayers for $17 billion (their 1/3 of the $50 billion).
are chock full of 20 something recent college graduates … completely lacking the skills, experience and judgment to work smart
Boy this reminds me of things I’ve read about how we staffed up the provisional authority or whatever it was called when Bremer was running the show in Iraq. Lots of them were hired from lists of people who’d worked in some Republican’s campaign or whatever and truly did not know shit from Shinola. So they tried to do things like set up a stock market complete with computer terminals, etc. before anybody got around to getting the electricity on for more than a few hours per day.
I wonder if any of this stuff ever gets to Feinberg. If so, I’d think he might be having some doubts about Bob. Somehow I don’t think a slice of the $50B is going to save these guys.
Oh, Campi got pwned. Chrysler is so busted!
I guess they plan to use the courts to stay out of Chapter 11.
And just think, our government wants to give them money so they can get parts from China and India….
Honda’s are more American than Chrysler’s.
What else you could expect from corporate America, especially Cry-slur.As if slashing on average 1100 job positions in car manufacturing per day is not enough.Where will those peopel go? where will they work? Do you realize people, you people that sit on government payroll, that these people represent clay legs your country is standing on? What the fuck will governmet tax to pay you cash for your cozy office slacking and paper shuffling?
Outsourcing is paying back. Strangely enough , I knew it already when I was 11 years old. It didn`t deal with intellect as much as conscience and sense of fair game…
One of the many common corporate sicknesses is the hiring of expensive consulting firms to do the work the company’s executives and managers should be doing for themselves. Oh so true!
For execs and managers the way to the top is all about not making mistakes and if you don’t make decisions you don’t make mistakes. Hiring consultants means execs can then blame them for any failures. Mistreating vendors leads to vendors not wanting to do business with you unless there are guarantees. I have seen a vendor promised a guaranteed profit if he just PLEASE makes the parts. Essentially the buyer of the parts then agrees to eat any crappy parts or pay to rework them, so much for quality.
I wonder where Campi went to school? He sounds like the most loathsome type of executive – arrogant and incompetent. Of course I work for a supplier so I am extremely jaded against people who think and act like he does. His ilk have grown very tiresome.
“You get what you pay for.”
It is as if we live in a society where the entire executive and managerial class has forgotten this simple, yet timeless bit of common sense.
John Horner :
One of the many common corporate sicknesses is the hiring of expensive consulting firms to do the work the company’s executives and managers should be doing for themselves.
Amen! I have never, ever, EVER heard of anything positive coming from the hiring of Accenture (i.e. Arthur Anderson) consultants in particular.
There was this guy named W.E.Demings. He also had this low cost high quality scheme too…that Toyota, Honda, Nissan and Mazda signed up for.
Now they beat Chrysler (and its malformed collection of contract made Chinese parts) in both cost and quality with “high cost” Japanese made parts.
Demings is now dead, but all his advise and teachings can be purcahsed for less than $20.00 at Amazon.com.
So instead of wasting what little money is left sueing Accenture, Chrysler management should type in “www.amazon.com” do a little reading and change themselves.
Thousands of workers, communities, families and even whole states will be economically devistated for generations if Chrysler management fails.
Take a walk through “Buick City” in Flint. Then fly to “Toyota City” Japan and take a walk through that vibrant successful city. Toyota City using Demings took all those jobs away from “Buick City.”
How much more economic ruin do we have to endure before leadership does the hard work to learn a new way? How does Chrysler leadership want this all to end?
Mc
Mr. Campi received a master of business administration from the Executive Program of the Weatherhead School of Management, Case Western Reserve University, 1988 and a bachelor of science in accounting from Indiana University, 1966.
More here:
http://mbs.cargroup.org/2008/content/view/124
Wow. Lotsa good stuff here…
First of all, when the Debt 2.8 go up the hill to fetch their bail of money, will any of our public servents, esp. maybe someone from the Great Lake State ask them Mr. Niedemeyer’s question:
“Why should our tax money be used for low-interest loans to automakers to create U.S. jobs when these same automakers are so damn busy outsourcing jobs to Mexico, Canada, China, South America, etc.?”
Yeah, I doubt it, too.
John Horner: +1
jurisb: “What else you could expect from corporate America, especially Cry-slur.” Exactly.
timd38: “Honda’s are more American than Chrysler’s.” Good statement. And while I believe I understand you and agree with the sentiment, the sad truth is they ARE Japanese. Cry-slur and the other Debt 2.8 are our boys. Almost makes one feel a little embarrassed. Or Am-barr-assed.
The Detroit-3 may be maintaining some Canadian jobs because the government has given them hundreds of millions of dollars in non-repayable corporate welfare, and has not sought reimbursement of previous hand-outs conditional on since violated employment guarantees.
Ah yes, the classic Consulting Firm business model at work. When Accenture was selling the service, they likely trotted out some very senior and knowledgeable people to impress the client. Once the contract was signed, the senior people are nowhere to be found. Bait and Switch at its finest. Chrysler shouldn’t feel too bad – there are many other large organizations that have had the same experience
How about this one: Why should our tax money be used for low-interest loans to automakers to create U.S. jobs when these same automakers are so damn busy outsourcing jobs to Mexico, Canada, China, South America, etc.?
Exactly. The big 2.76 want to be “global” but expect the American taxpayer to bail them out.
John
John Horner : One of the many common corporate sicknesses is the hiring of expensive consulting firms to do the work the company’s executives and managers should be doing for themselves. Most of these consulting firms are chock full of 20 something recent college graduates working 80 or more hours a week, but completely lacking the skills, experience and judgment to work smart. But, that is OK because these kids are paid less than a third of what they are billed to the client at … so rack up the hours!
Truer words/never spoken/etc…I had to work with Accenture and Deloitte for IT implementations and both were colossal failures. Even worse, they were ignorant and cocky.
No surprise that Chrysler would hire them. Maybe Accenture is responsible for Chrysler’s terrible interiors too!
Morea, you missed the best part!
Campi has more than 35 years of experience in the sourcing industry. Before joining Chrysler, he was President and CEO of Genesis Consulting Group, a company he founded.
From his bio at Chrysler’s website.
Ah, the irony of a former consultant getting screwed over by a consulting company. He shoulda known better.
John Horner, I absolutely whole heartedly agree. I was one of those 20-somethings (well, I was 30 something) and your summary is accurate. The partner I worked for had never worked in the industry he specialized in. Not one day. He graduated from engineering, got his masters at MIT, and went straight into consulting. I at least had worked in the industry for five years. I had a pretty commonplace job in the industry before joining the consulting firm, and when I talked to the partner about my previous job, it was obvious he had no idea what the job entailed.
Big consulting companies routinely receive handsome fees for consulting in areas in which they have no experience and of which they have no knowledge.