Automakers assembling a diverse supplier ecosystem

Lauren Rakolta, right, CEO of DFM Solutions, said GM’s supplier diversity team is a major part of her company’s growth. DFM went from $18 million in annual revenue to an expected $100 million this year.

For suppliers with diverse ownership, there are bridges to success in the auto industry just waiting to be crossed.

General Motors, Ford Motor Co. and Stellantis are among automakers that have helped diverse suppliers along on their journeys as they work to develop a rich ecosystem of service providers that can be partners for years to come. Prime examples are the supply chain stalwarts at Detroit’s James Group, and DFM Solutions, a Detroit operation that specializes in facilities and construction management.

GM, the first automaker to begin a minority supplier program in 1968, spends around $7 billion annually with diverse suppliers. The former Chrysler Corp., now Stellantis, founded its minority supplier program in 1983 and has spent more than $100 billion with diverse suppliers since. Ford has spent more than $161 billion since 1978, the year it officially created its supplier diversity program. Ford’s supplier diversity initiative was a byproduct of the inner-city supplier development project it formed in 1968.

Tamara Hicks, GM’s assistant director of supplier engagement, said companies looking to grab the automaker’s attention should understand how they align with its business objectives, which are driven by a vision of “Zero Crashes. Zero Emissions. Zero Congestion.” The company is on the lookout for diverse suppliers that can provide innovative technology.

Hicks sees herself as a mentor for the diverse suppliers trying to get a foot in the door at GM. Some may be smaller companies that haven’t worked with a large corporation before.

Now in the supplier engagement role for two years, Hicks has been with GM for 23 years, working in numerous capacities in purchasing, manufacturing and supplier quality engineering, so she knows the lay of the land. She can clue suppliers in about the stakeholders they’ll be interviewing with and ensure they’re prepared.

“I would say the biggest challenge here is just you making sure that our diverse suppliers have a voice within corporate America,” Hicks told Automotive News. “I’m here to be that bridge builder to make that connection with our key stakeholders [so they] know that they are available to do business with us.”

Lauren Rakolta, CEO of DFM Solutions, said she doesn’t know where her company would be without GM’s business. Rakolta purchased majority ownership of DFM in 2015.

“From the very beginning,” she said, there were three or four supplier diversity advocates at GM that mentored and opened the door for opportunities. While DFM also does business with Ford, Honda, Stellantis and Toyota, GM was harder to get into, she said. The automaker’s supplier diversity crew kept knocking on doors at the purchasing unit to get Rakolta a meeting.

GM representatives such as Diane Vansant, manager of global purchasing, manufacturing services, showed her “how to best bid business, perform business,” Rakolta said. They “just have given us unbelievable feedback.”

The supplier team at GM is a major part of her company’s growth, Rakolta said. DFM Solutions went from around $18 million in annual revenue when she bought it and is expected to flirt with $100 million in 2023. The company provides services at four GM facilities, including janitorial work along with some electrical and maintenance services.

Vansant said DFM is regularly on GM’s bid lists for projects after proving itself in previous efforts at GM sites in Marion, Ind., and Toledo, Ohio.

“I’m so grateful that they’ve given me this opportunity,” Rakolta told Automotive News. “We’d be significantly under that $100 million mark if we didn’t have GM.”

Stellantis has fostered the growth of Black suppliers across an array of industries.

Along with the National Business League, Stellantis launched the National Black Supplier Development Program in 2021. The automaker sometimes will leverage the talents of these companies after making a connection.

Bruno Olvera, head of supplier diversity development of Stellantis North America, said the automaker has been casting a wide net for diverse suppliers with its matchmaking events each year. He said suppliers should be thinking about Stellantis’ Dare Forward 2030 business plan, which calls for an aggressive shift to electric vehicles. By 2030, the company aims for half of its U.S. sales to be EVs.

“For suppliers in that side of the house with EVs and technology and software, keep going with those operations,” Olvera said. “That’s the future; that’s something that we are moving forward with.”

Growing up, James Group CEO Lorron James didn’t think he’d join the family business, but continuing its trailblazing legacy would later become his mission.

James Group got its start as O-J Transport Co., hauling beer and auto parts. James’ father, John A. James, founded the company in 1971, and it has grown over the years to offer an expansive service list that includes logistics, supply chain management and e-commerce services.

John A. James was working for Chrysler Corp. when he started O-J Transport with his uncle, Calvin Outlaw. James left Chrysler to go into the trucking business full time in 1978. He and Outlaw purchased 23 used trucks around that time to build their fleet, Crain’s Detroit Business, a sibling publication of Automotive News, reported.

It took years of legal wrangling at federal and state levels to obtain O-J Transport’s 48-state and international operating authority, the company said.

John A. James, according to the James Group website, is “the first African American whose company was issued broad operating authority to transport automotive parts and other commodities in Michigan.”

Today, the group’s clients include Ford, GM, Stellantis and Toyota.

James joined the company in 2007, two years after graduating from Arizona State University, where he played football. A sports fanatic all of his life, he initially planned to make a career in the athletic world. From 2004 until 2007, he worked as a community affairs coordinator for Major League Baseball’s Arizona Diamondbacks before returning to Detroit to work for his father.

“Being back in Detroit was where I needed to be to make sure that I kept the family legacy going,” James said.

On his second day on the job, James asked his father where his office was located. The elder James gently led him over to a forklift in a warehouse and said that was his office. Looking back, James said lightheartedly that asking that question was one of the biggest mistakes of his career.

So he began his stint on a forklift and ended up holding numerous jobs in the company. James’ list of duties have spanned from truck driver, dispatcher and plant manager to working in marketing and sales. In 2018, he became CEO of James Group, which is composed of several subsidiaries.

Renaissance Global Logistics, which handles export consolidation for Ford, ships to 16 countries around the world. Renaissance is one of Ford’s first minority suppliers, James said, with a relationship going back to 1971. The company also does logistics services for Stellantis and GM.

Five Crowns Trucking shuttles between its customer’s sequencing centers and two Stellantis manufacturing plants.

Magnolia Automotive Services, a joint venture with James Group and Toyota Tsusho America, is a tire and wheel assembly operation for the Toyota Corolla in Tupelo, Miss., and for two crossover vehicles for Toyota and Mazda in Huntsville, Ala.

“Our business is pretty diversified,” James said. “Although we’re very heavily automotive, we do very different things for each of our customers.”

James’ brother, U.S. Rep. John E. James for Michigan’s 10th Congressional District, is CEO of Renaissance. Their sister, Keri James, is the founder and director of the philanthropic John A. James Foundation.

Young entrepreneurs looking to jump into the automotive space some day should understand that they may have to make adjustments at times, James said. Having a team around that can sharpen them is also key, he added.

“You don’t have to have everything figured out,” he said. “Even if you have a game plan, it’s probably going to get interrupted, and that’s OK — that’s totally OK. It’s probably a little bit less about what they do. More so, it’s who they’re around.”