Diversity Squeeze --> With few exceptions, the brutal economic storm of 2009 battered the biggest and the smallest of American businesses.
This includes the bulk of the nation's largest corporations, and, by extension, countless smaller minority-owned businesses -- from janitorial services to IT companies to legal firms -- that land major contracts with them.
Verily it's a fact 2009 was a challenging year for supplier diversity.
Put another way, because the economy tanked, revenues dropped and many corporate giants had less money on hand for extending contracting opportunities to minority- and women-owned businesses -- or to any business, for that matter.
But despite the setbacks, paragons of the practice remain, and this issue of HispanicBusiness Magazine is dedicated to highlighting them.
Like last year, Comerica Bank is at the top again for its commitment to contracting with minority- or women-owned firms.
Comerica topped HispanicBusiness' list based on several measures. In addition to setting aside 25 percent of its budget for minority contracts, it ranked highest in three major areas: management involvement in supplier diversity; procurement from minority suppliers and outreach efforts to minority suppliers. (See a full list of how the Top 25 companies faired in the accompanying scorecard).
But in a reflection of the kind of year 2009 was, the amount of money Comerica spent on minority- and women-owned contractors fell in 2009, to an estimated $30 million from $45 million the year before. Meanwhile, the company's ranking on the Fortune 1000 slipped in one year from No. 501 to No. 559
"This year has been a real challenge," Don Alessi, Comerica's vice president of purchasing, told HispanicBusiness Magazine. "Our spending with anyone has been down, just because of reduced budgets."
Rounding out the rest of the Top 5 are Southern California Edison which set aside 16.5 percent of its budget for diversity suppliers, Consolidated Edison Co. of New York, (21 percent), Wells Fargo & Company, (23 percent), and American Electric Power, (23 percent).
In another telltale example of tough times, the company boasting perhaps the largest supplier diversity budget in terms of dollar amount--Ford Motor Co.--saw its impressive outlay shrink by a full $1 billion from 2007 to 2008, to a still gigantic $3.3 billion. Ford's final figures for 2009 weren't in by press time, but executives expect them to be similar to last year's. Ford, which set aside 10.1 percent of its budget for minority contracts, ranked No. 11 on this year's list.
Gone from the 2010 list are at least four financial companies that graced the index in 2009, some of them casualties of the Great Recession. These include the ill-fated Washington Mutual Inc. -- now part of JPMorgan Chase -- and Merrill Lynch, since acquired by Bank of America.
New additions include two energy companies (Consolidated Edison of New York and American Electric Power) three financial companies (Wells Fargo, JPMorgan Chase and Union Bank of California), PepsiCo Inc. and the software-and-hardware manufacturer Pitney Bowes Inc.
This year, like last, banks, energy firms and hospitality companies dominate the top 10.
In general, the purpose of any given supplier diversity program is twofold: to inject economic vibrancy in historically marginalized communities, and to help corporations gain a competitive foothold in diverse markets.
But the programs also serve an even broader purpose: helping maintain the economic vitality of the nation.
