You could make a strong argument that the programs available today to minority-owned supplier companies don't go far enough. That's clear from just a cursory glance at our first ranking of minority-owned plastics processors, which appears on Page 10. Minority processors face all of the same challenges as majority-owned companies. They're being squeezed by supplier consolidation and global competition. They're under the same pressure to grow, expand their services and follow customers everywhere they do business.
But it is obvious from our ranking that most minority-owned firms don't have the bulk to compete with the big boys. Very few post sales of more than $100 million. The vast majority are niche players and small Tier 2 suppliers.
Minority companies historically have been at a disadvantage. They've had a tough time getting financing, and they haven't been encouraged by customers to add new technology or value-added secondary operations.
What's the best way to deal with these problems?
Some companies take a radical approach — they opt out. Firms such as Sigma Plastics Group of Lyndhurst, N.J., and Florida Production Engineering Inc. of Dayton, Ohio, could qualify as minority-owned processors, but they reject some of the help available to them. It may sound crazy, but there are advantages to ignoring the small set-aside contracts and low-technology projects that some customers allot to minority-owned suppliers.
But not all minority processors can quit cold turkey — and we don't think they should. Many don't have the access to capital, or experience with state-of-the-art technology, to compete without some assistance from their customers.
Yet minority-owned plastics processors wince when they hear words like "quota" and "affirmative action."
Yes, some original equipment manufacturers have programs to boost their business with minority-owned companies. The efforts, especially at automakers, help minority processors get their foot in the door and give them an opportunity to succeed.
But that's all they do — give them a chance. No guaranteed profit. No unfair advantage. It's a mutually beneficial relationship — carmakers want to market their products to the minority community, and it helps them to be able to point to successful programs they have in place that encourage minority suppliers.
Minority-owned processors fail sometimes — just like majority-owned firms.
But their customers need to make sure that the programs created to support minority-owned processors don't contribute to the failures. Instead, the programs should nurture more companies, so they can be like Sigma and FPE and eventually outgrow the need for assistance.