HispanicBusiness

Some suppliers have simply been unable to stay afloat. Among the hardest hit are auto suppliers. This is especially sobering because Hispanics have made many significant economic inroads in the industry. Four out of the top 10 companies on our 2008 list of the HispanicBusiness Top 500 are auto dealers or suppliers. While the so-called federal bailout should help in the long run, one expert described the recessionary effects on Hispanic auto suppliers as "catastrophic." The Big Three automakers spent almost $1 billion with Hispanic suppliers in the past few years, according to published reports. A lot of that has evaporated during the free-fall of the recession.

Sectors' Jobless Rates Exceed Nation's

The construction sector has also been battered, as well as manufacturing and retail, all "overrepresented" by Hispanics, according to Pew Hispanic Center. These sectors have seen unemployment top the average 10 percent unemployment suffered by the nation's workforce as a whole in December.

With most minority suppliers clearly hurting, what are major companies planning to do to help them, and will it be enough? "We're doing everything we can, but the recession has forced all major corporations to reduce overall spending," said Don P. Alessi, national minority business development coordinator for Comerica, the banking firm, which was ranked No. 1 on HispanicBusiness' list of top supplier diversity companies. "However, we are continuing to adhere to the goals we established before the recession regarding supplier diversity. ... In diverse communities like Texas, California, Michigan, Arizona and Florida, we are totally committed to our mission of mirroring our supply base to our customer base." The toughest challenge for Comerica and other large corporations in 2009 is to maintain a viable list of diverse suppliers because the economic conditions have caused a serious retraction in the available suppliers, according to Mr. Alessi.

The company is taking a proactive role by accelerating payments to suppliers; encouraging them to become approved "credit card merchants" to increase the ease and speed of purchases; introduce them to the corporation's national suppliers so they can more easily gain contracts as second-tier and subcontractors; and making coaching and networking opportunities available.

General Mills, a top 20 firm on the HB list of top Supplier Diversity companies, is also supplying coaching to minority suppliers and is increasing company communications with them so problems can be more easily resolved, according to James Momon, the company's supplier diversity manager.

General Mills' continued support is vital because the food service sector is an important one for Hispanic suppliers. Our calls and e-mails to nearly a dozen other major corporations went unanswered.

"Are American corporations suffering so much they can't respond or are they using the recession to scuttle their minority programs?" pondered Ms. Michel. "It's an extremely important question."

Waging A Fight For Minority Suppliers

Although many suppliers have already been hit hard by the recession, the major challenges may still be in front of us. The specter of increasing difficulties loom so large that in January, Ms. Michel was persuaded by the council's board members to delay her announced retirement so she and the organization could mount a full-fledged initiative to fight for minority suppliers.

"A group of organizations is meeting right now in Washington, D.C., to develop an agenda to help minority suppliers," she said then. "I don't know when they will announce that agenda, but I know there is tremendous concern that the first economic stimulus that came out for lending institutions set the bar so high that nearly every minority bank was excluded. Hispanics, women, and African-Americans raised so much hell that we have been promised that there will be an amendment to lower the threshold next time around. That is the type of action we have to take to protect suppliers as well."

Ironically, the possible consequence of the massive bailouts – higher taxes -- also has many suppliers worried. "Our biggest economic concerns have to do with the new administration," said Nina Vaca, CEO of Pinnacle Technical Resources in Dallas. "Increased taxes on small and medium businesses and/or new requirements regarding health care could significantly impact us." Ms. Vaca met with President Obama's transition team to express her concerns and hopes to continue the dialogue throughout 2009.

With the number of contracts shrinking, competition will be fierce.

"We have to be able to save the client money and provide them with a serious solution," said Ms. Hernandez. "We have to be able to perform. That's what will get us through."

While minority suppliers battle to stay afloat, the fight in Washington remains important. "We are keeping our eyes on corporate America so it doesn't use the recession to walk away from minority suppliers," said Ms. Michel. "America won't recover unless we all recover."