Case
25: White female owned business is WRONG color for Chrysler and U.S. SBA
SBA Fact Sheet:
Automotive Racial Quota Program
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Return to Case 25 "White Female Denied Work by Automakers Due to Skin Color" |
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(Official
U.S. SBA document, unedited)
FACT SHEET: AGREEMENT WITH U.S. AUTOMAKERS Background Each year the three U.S. automakers collectively purchase nearly $120 billion in supplies and services from other companies in the private sector. A major concern to both the automakers and the Government has been the share of these dollars directed to minority businesses. In 1993, General Motors Corporation, Ford Motor Company, and Chrysler Corporation instituted a program to further their commitment to minority business. They called this program "Tier 1/Tier 2" to reflect a key feature of the program - namely, that large business suppliers to the automakers (considered Tier 1) would be required to make the same commitments to minority business as the automakers themselves. This has enabled more minority-owned businesses to become subcontractors and suppliers to the automakers' Tier 1 suppliers and to participate more fully in the subcontracting opportunities of the automotive industry. On February 19, 1998, SBA Administrator Aida Alvarez signed an agreement with the three automakers that recognizes the Tier 1/Tier 2 program and sets forth the specific objectives, in dollars and percentages, for each company. The agreement also sets forth the reporting requirements, defines the minority business entities that can participate, and clarifies the role of SBA. It requires the automakers to target outreach efforts towards the inclusion of companies certified under the Section 8(a) Program; and it mentions, in a more general way, the automakers' support for SBA's initiatives for women-owned small businesses. Objectives General Motors will increase its Tier 1/Tier 2 subcontract awards to minority and small disadvantaged businesses (SDBs) by $1 billion, resulting in Tier 1 subcontract awards of $2.2 billion and Tier 2 subcontract awards of $800 million in 2000, the third and final year of the pilot. Ford will increase its Tier 1/Tier 2 subcontract awards to minority businesses and SDBs by $900 million, resulting in Tier 1 subcontract awards of $2.5 billion and Tier 2 subcontract awards of $800 million in the year 2000. Chrysler will increase its Tier 1/Tier 2 subcontract awards to minority businesses and SDBs by $1 billion, resulting in Tier 1 subcontract awards of $1.5 billion and Tier 2 subcontract awards of $1 billion in the year 2000. Benefits to Small Business Subcontract awards to SDBs and other minority firms are projected to increase from $5.9 billion to $8.8 billion as a result of this agreement. This is an increase of $2.9 billion, or 49 percent, over a period of only three years. This will ensure that, by the year 2000, at least 5 percent of all the automakers' purchases are made from minority and disadvantaged firms. Firms in the SBA's 8(a) portfolio will receive special attention, helping them to reduce their dependence upon 8(a) contract support. SDBs will be able to market their products and services to a greater number of large businesses, not just the Big-3 automakers, because the Tier 1/Tier 2 concept "flows down" the subcontracting requirements to the automakers' large business suppliers. Each year the automakers will sponsor, in aggregate, at least ten SDB executives for a formal minority business executive program such as that at the Amos Tuck School of Business at Dartmouth College or the University of Wisconsin, for a total of 30 SDB executives during the three years of the pilot. 8(a) companies will receive technical assistance from the automakers as may be necessary and appropriate to meet the requirements of the automotive industry for quality and delivery, and they will be eligible to apply for equity funding from investment companies funded by the automotive industry. The automakers will support other SBA pilot programs and initiatives for small disadvantaged and women-owned businesses - for example, by participating as speakers or panelists in Dollar$ and Sense for Women-owned Business workshops to discuss opportunities for women-owned small businesses in the automotive industry. SBA's Role Through its network of Commercial Market Representatives (CMRs), SBA will assist the automakers to identify SDBs they can use as suppliers and subcontractors. Many of these firms will come from SBA's 8(a) portfolio - more than 6,000 firms that have gone through a rigorous application process in order to be admitted into the 8(a) program. Other firms will be identified by means of SBA's new PRO-Net system, an Internet-based database containing profiles on more than 171,000 small businesses. The CMRs will review the automakers' achievements under this agreement on an annual basis. The CMRs will also assist the automakers' Tier 1 suppliers in developing subcontracting plans with meaningful opportunities for SDBs and other small businesses - an especially important component since many of these companies have never before been required to have a subcontracting plan. Finally, the CMRs can advise small businesses on how to market their products and services to the automakers and their Tier 1 suppliers. Assistance Available from SBA Through its network of CMRs and other employees, SBA can provide assistance to both the large and small businesses participating in this pilot. CMRs can counsel large businesses on how to prepare subcontracting plans and meet the other requirements of the law, and they can counsel small businesses on how to market their products and services to the automakers and their Tier 1 suppliers. For the complete list of CMRs and other SBA points of contact, see the "Assistance Directory" on the Internet at SBA's Home Page for Government Contracting: http://www.sba.gov/GC/. If you prefer, you may write or call:
Points of Contact There is one CMR in each of the six SBA area offices for Government contracting who has primary responsibility for counseling small businesses on this initiative. The names, addresses, and telephone numbers of these key individuals are as follows:
AREA 1 = CT. MA. ME. NH. NJ. NY. PR. RI. VI. VT. Felix de la Torre AREA 2 = DC. DE. MD. PA. VA. WV. Terry Budge AREA 3 = AL. FL. GA. KY. MS. NC. SC. TN. Mary Ann Korre AREA 4 = IN. IA. IL. KA. MI. MN. MO. ND. NE. OH. SD. WI. Pamela Thompson AREA 5 = AR. CO. LA. NM. OK. TX. Larry Lytle AREA 6 = AK. AZ. CA. HI. ID. MT. NV. OR. UT. WA. WY. Lyman Kano [Original SBA document link: http://www.sba.gov/outreach/big3/fact.html ] END Case 25 Docs: U.S. SBA "Fact Sheet" on Big Three Racial Quota Program |
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Case 25: MAIN White female owned business is WRONG color for Chrysler |
Case 25: DOCS U.S. SBA Quota Agreement with Big Three Automakers |
Case
25: DOCS U.S. SBA "Fact Sheet" on Big Three Racial Quota Program |
