DETROIT, Michigan (April 20, 2010)—Dan Knott, head of purchasing for Chrysler Group, said the auto maker's days of behaving badly toward its suppliers are in the past.
“The days of the arrogant” auto maker, he said, “where we forced suppliers to kneel at our door and sprinkle rose petals before they come in, absolutely has to be over. It's a collaborative business. If we work together, we'll have a better equation at the end,” said Knott. He was a speaker at the 2010 SAE World Congress in Detroit.
Since taking his current position in December, Knott's main focus has been to repair relations with suppliers, many of which were demoralized during the days when Cerberus Capital Management owned Chrysler. Cerberus appointees made noises about working collaboratively with suppliers, then sued a number of them.
Knott said he has met with about 80 suppliers this year. He said he makes sure that before any talks about future projects begin, he discusses with them any earlier strained ties between the two sides.
“If I talk about integrity and transparency with you, and we have legacy issues that we never talk about, it's a little disingenuous, isn't it?” Knott said.
He said that paying suppliers on time and direct dialogue have improved relations between Chrysler and its suppliers. Problems that once took two years to solve now take two weeks, Knott said.
“I think we're absolutely moving in the right direction,” he said.
Knott reiterated Chrysler's plan to pay suppliers at certain milestones a percentage of what they are owed, a sharp departure from the piece-payments approach of the past.