When MPS Group CEO Roderick Rickman reviewed bids to upgrade the computer network at his Detroit-based industrial services company, he was pleasantly surprised to find that the best proposal came from another minority business.
"I saw this opportunity to circulate revenue within the (minority) community and to help sustain growth for another company," Rickman said.
For Livonia-based Information Systems Resources, the MPS contract -- its biggest to date -- allowed the company to add six jobs.
"Contracts with high profile companies like MPS Group open up the supplier base to companies (like mine) who are looking to make a footprint in the auto industry," Information Systems Resources President Luther Elliott said.
As all auto parts makers struggle to survive amid vehicle production cuts and rising raw material costs, minority-owned and operated businesses are exploring ways to work together to better compete.
In some cases, such as MPS's deal with Information Systems Resources, larger minority companies are awarding work to smaller ones to help them survive. In other cases, suppliers are reconsidering options they might not have considered 10 or 20 years ago, such as joint ventures or partnerships.
Yet another emerging trend is "bundling," where several minority-owned businesses form an alliance or partnership to compete for large contracts.
"Big companies like doing business with big suppliers," said Jethro Joseph, senior manager of supplier diversity development at DaimlerChrysler AG's Chrysler Group. "This was not necessarily the focus in the past, but we are looking at alternative ways to address the market. We're facing a new day -- either you adapt or die."
This sense of urgency was a theme throughout last week's annual Michigan Minority Procurement Conference and Trade Fair at Cobo Center.
"This year and next year are the most serious years in restructuring for all auto suppliers" said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "We will know then who is going to be in the game, and the winners and losers."
Minority suppliers face the same challenge as all parts makers: General Motors Corp. and Ford Motor Co. are cutting production amid declining demand.
"These are difficult times and we see some of our competitors going out of business," said Richard Young, executive vice president of minority-owned Certified Tool & Manufacturing, which has operations in Illinois and Kentucky. For the first time in its 50-year history, Certified is considering a joint venture.
"You have to have a fresh look and companies are looking at new ways of doing business, which are joint ventures and partnering, and not the old ways, which meant going alone," said Young, whose company was among more than 500 exhibitors at the conference.
Ron Hall, CEO of Bridgewater Interiors, a joint venture with Johnson Controls Inc. in Plymouth, believes that profitable minority-owned businesses will always be valuable to auto manufacturers and the communities where they do business.
"We traditionally hire minority workers who are then able to buy their products," Hall said.
Jacqueline Mitchell is a Metro Detroit freelance writer. Reach her at DetroitWriter[at]aol.com.