Round 'Em Up

The Big Three U.S. automakers advance minority subcontracting awards.

In February, three major automakers--Chrysler, Ford and General Motors--joined forces to substantially boost minority subcontracting opportunities. The SBA-supported agreement they signed, the first of its kind, not only fosters strategic alliances between minority and nonminority suppliers, but also increases the current contracting allotment of all three companies combined by almost half--raising the level to $3 billion over three years.

"The auto companies asked the government to enter into an initiative with them that would recognize their commitment and efforts to increase purchases for minority companies," says Judith Roussel, the SBA's associate administrator for government contracting. The resulting initiative is an extension of a program already in existence. Among other things, the automakers' agreement will encourage first-level (Tier 1) companies to subcontract with second-level (Tier 2) companies and provide new business opportunities for SBA-certified 8(a) firms.

After three years, the SBA and the Big Three will evaluate the initiative's success and determine whether it should be continued and expanded.

This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Round 'Em Up.