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Latino Daily News

Monday September 6, 2010

Economic Downturn Negatively Effecting Supplier Diversity & Minority Contracting Opportunities

An under-reported fact of the faltering economy has been the negative effect on contracting opportunities for minority-and women-owned businesses.  Corporations outsourcing and contracting protracted due to economic challenges and many minority firms felt the squeeze. 

For example, Comerica Bank, that has been recognized by Hispanic Business as a top minority supplier, spent $15 million less on minority suppliers in 2009.  Ford Motor Co., which has one of the country’s largest supplier diversity budgets, saw its minority contracting dollars decline since 2007 to $3.3 billion dollars which reflects a $1 billion decrease.  It remains committed to setting aside 10.1% of is budget for minority contracts with the decrease a result of its own shrinking revenue.  Another major player in supplier diversity, PepsiCo spent $1 billion in 2009 on its minority contractors which remained flat from the year before.

Nonetheless, Comerica Bank, Ford and others are committed to setting aside percentages ranging from 5% to 25% of their budget to minority contracts and are committed to the practices of supplier diversity.  Nationwide, the amount corporate America spends on minority contracts has been steadily growing from $12.5 billion in 1988 to $100 billion in 2009

“The best way to build strong minority communities is to have strong minority businesses,” Harriet Michel, longtime president of the National Minority Supplier Development Council stated.  “The minority population is still growing in size and economic impact,” she added. “The economy can’t recover if large segments of the population are left out.”