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FCA has announced that it will no longer hold its purchasing staff to individual cost-saving goals when dealing with suppliers.

The original goals had handcuffed staffers when suppliers have sought pricing relief. FCA is notoriously hard on its suppliers, which may or may not be factored into recent quality SNAFU's from Auburn Hills.

FCA said the buyers will not work in teams who will work cooperatively to meet company goals. It's expected that buyers will begin selecting higher quality components as it seems compensation won't be tied exclusively to savings.

Tom Finelli, FCA's VP for Purchasing and Supplier Quality said “This sort of hit us across the face a few weeks ago, we realized that our relations with suppliers were positive at the leadership level, but were struggling at the buyer level.”

This marks a fundamental shift in FCA's purchasing methodology. Previously cost was the main hurdle for suppliers to keep themselves in consideration, now they will focus on component quality as a consumer would.

FCA is in dire need of shoring up their supplier relations, Planning Perspectives Inc. have noted that FCA is slow to make payments and unwilling to help suppliers cut costs. The changes will take effect in early 2016.
 

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Probably not too much of an increase in future vehicle prices as they save quite a bit in recalls with the longer lasting components. The price increase will be absorbed by future recalls and repairs due to faulty parts.
 

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Probably not too much of an increase in future vehicle prices as they save quite a bit in recalls with the longer lasting components. The price increase will be absorbed by future recalls and repairs due to faulty parts.
If price increases, one thing you can be sure of is it won't be to a point that it no longer makes them look as attractive as the competiton.
 

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Was just in the other thread on quality, and it will be interesting to see if this policy has any effect, both on the quality, but also in turn, to their sales. Maybe they are losing sales because of quality, but don't know it because they haven't seen what things are like when they do make quality vehicles.
 

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Haven't heard much from Fiat lately. Is it worth it for FCA to try and salvage the brand or expand and improve the Jeep one?
I think it is worth for them to hold onto the brand, instead they might just need better products and to improve whatever process they're using. Looking at the type of vehicles they're setup to offer, they still have a place in the market, they just need to do a better job of it.
 
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