Chrysler MatchmakerOpening Ceremony September 16, 2010
Welcome & Introduction Kevin Bell Senior Manager Supplier Diversity Development Purchasing & Supplier Quality
Agenda • Welcome & IntroductionKevin Bell • National AnthemJennifer Pasha (MPS) • Opening RemarksDan Knott • Elected Representatives • L. Brooks Patterson – Oakland County Executive • Robert A. Ficano – Wayne County Executive • Mark Jones (rep. for Mayor Dave Bing) – Director, Targeted Business Development • House KeepingKevin Bell • Ribbon Cutting
Opening Remarks Dan Knott Senior Vice President Purchasing & Supplier Quality
Welcome- DSD: Chrysler Matchmaker The Matchmaker Event generates significant revenue. Purpose: To facilitate long-term business relationships between minority suppliers, Chrysler employees, and Chrysler’s majority suppliers. Description: Exhibitors include 200 minority, women, veteran, and majority Chrysler suppliers which are set-up in trade fair fashion for one day. Over 1,000 guests attend annually. Exhibitors report monthly any successful business activity as a result of the event. Results: > $1.5 Billion in new business opportunities for exhibitors since 2000.
August Sales & Q2 Financial Updates • August sales increase 7% year-over-year (99,611 units sold) • Fifth consecutive month of year-over-year increases • US industry sales figures for August are projected at 11.5M SARR • Q2 Financial Highlights: • Net Revenues increased to $10.5 billion, up 8.2% from Q1 2010 • Operating Profit in at $183M; $40M increase from Q1 2010 • Modified EBITDA was $855M, $68M increase from Q1 2010 • Cash Position increased to $7.8B, brining total available liquidity to more than $10B; Net Industrial Debt decreased to $3.4B • Market share improved to 9.4% in US compared to 9.1% Q1 2010; Canada share remained strong at 12.9% • 2010 guidance remains unchanged (including a minimum of operating breakeven), but will probably be revised upwards on the basis of Q3 2010 results
Purchasing & Supplier Quality Guiding Principles Guiding Principles for Success 1. Transparent expectations and communications from both sides of the relationship. 2. Absolute and in-depth collaboration for delivery of quality, cost, supply and innovation. 3. A prevailing sense of urgency to meet objectives and solve problems as they arise. 4. Integrity and accountability in actions from both sides of the relationship. 5. Rewarding, strategic and long-term business collaborations . 6. Empathy and advocacy for the other party’s issues. 7. Responsible commitment to our employees, the global community and the environment.
DSD: Background & Awards Chrysler Has A History Of Leadership In Supplier Diversity By… • The Chrysler Group LLC Diversity Supplier Development (DSD) Department was established in 1983. • Chrysler passed the $1 B annual sourcing mark in 2001 and is an active member of the Billion Dollar Roundtable. • In 1991 Chrysler was one of the first corporations to embrace the concept of mandating tier two sourcing objectives and added language to all purchase orders.
Why Should We Care About Diversity? US Population Minority Purchasing Power $ Trillion 263 MM 290 MM 394 MM Minorities 69MM 26% Minorities 114MM 39% Minorities 187MM 47% Anglo 194MM 74% Anglo 176MM 61% Anglo 207MM 53% Minority buying power projected to reach $2.1 Trillion in 2009 Minorities projected to represent half of the US population As the demographic makeup of the United States changes, pursuing the minority community as customers will become an increasingly important objective.
Minority Customers are Valuable CustomersModels with Large Minority Customer Acceptance Minorities represent a key customer segment for Chrysler LLC. By “over indexing” on the above vehicle lines, Chrysler’s sales and profits are significantly enhanced.
Supplier Diversity Business Case The Bottom Line • Commitment to diversity sourcing delivers bottom line results by increasing sales and reducing costs. • Government requires active participation with diversity suppliers as a condition of doing business. 2008 Chrysler Govt Sales over $750 Million. • Minority supplier sourcing creates customers • Minority purchasing power in US quadrupled in the last ten years • Minorities represent a key customer segment for Chrysler Group LLC by “over indexing” on 10 models.
2010 DSD Targets Supplier Goals 2010 Minority Sourcing (MBEs) 10% Women Owned (WBEs) 3% *Goals apply to ALL suppliers, both domestic and foreign
Tools for Improvement: EBSC (External Balanced Scorecard) 20% 20% 20% 20% 20% Quality Delivery Cost Product Dev. Process Partnership Diversity: 5% Purchasing Support: 10% Eng. Survey: 5% Speed to Market Innovation ER&D DVP&R • Purpose • Measure Supplier Performance: • Allows easy comparison of one supplier against another • Tool to identify supplier weak areas which need development • EBSC scores used to create long range sourcing strategies Note: If supplier receives a failing grade in any Supporting Metric, they get zero for the Primary Metric. A red in diversity score = 0 for Partnership and therefore a max score of 80 rather than 100.
Renewed Emphasis: New Initiative – Red Supplier Day Purpose: To provide focus and encouragement to 100+ of our largest tier 1 suppliers who have repeatedly failed to source a minimum of 5.5% of their spend with women and minority owned businesses. Description: Tier 1 CPO’s will be asked to be present at this event which will open with a status update and overview by Dan Knott. The remainder of the 2 hour session will consist of CEO’s, CPO’s and Consultants describing effective diversity initiatives, strategies and success stories.