Chrysler’s plan to speed up payment for some of its suppliers by the end of January does not extend to logistics suppliers, according to the company.
Chrysler told Automotive Logistics News that the payments are specifically directed at engineering, design and development of vehicle components and that it is not an "across the board" policy, applying primarily to vehicle components that its customers “can see and touch”. This includes a focus on interior components that are costly to develop.
However, under the direction of purchasing head Dan Knott, Chrysler is working hard to improve many of its supplier processes to speed payment, according to a spokesperson, with the ultimate aim of making its supply chain more competitive as overall car production in North America rises in 2010.
“I would say that any moves that Dan Knott and the rest of the management team make to speed payments or streamline processes for our suppliers will increase the overall health of our supply base and ultimately benefit the entire enterprise,” said the spokesperson.
From an average payment time of 287 days last year, the carmaker claims it has reduced that figure by 105 days under a claim resolution process that was introduced at the end of 2009. However, this claims process did not apply to logistics providers who are paid according to separately established contract terms. The process introduced at the end of 2009 only applies to production suppliers.
According to Wards Auto figures, North American car production is set to increase 69% on the first quarter of last year, with Chrysler forecast to increase production by 92% in that period.
Chrysler, however, was more reserved in its outlook. “Those aren't our numbers, and if you consider the extraordinarily unusual year we had last year I think any year over year comparisons are dangerous to make,” said the company spokesperson.
