Bloomberg: John Taylor on Piston Group
At a time when corporations are under pressure to show progress and transparency on racial equality — even President Joe Biden has made procurement a key tool in his racial equity agenda — the Piston Group’s decertification could complicate minority spending for powerhouse automakers like General Motors Co., Ford Motor Co. and Jeep owner Stellantis NV. In 2019, GM, Ford and Stellantis spent an average of $7.5 billion each with diverse suppliers, which include businesses owned by women, veterans, disabled people, LGBTQ persons and, for Ford, small enterprises. GM spent 28% of its minority spend with Black-owned firms that year; Ford and Stellantis didn’t disclose that detail. Vinnie Johnson went from a clutch player for the championship Detroit Pistons to owner of one of the biggest Black-owned auto suppliers in the U.S. Now, the entrepreneur says he’s at risk of losing up to $2.5 billion in contracts because his company’s executive ranks are too White. The Michigan Minority Supplier Development Council stripped Johnson’s company, Piston Group LLC, of its “minority” status, a designation that gave him a foot in the door of global automakers, which award lucrative supply-chain contracts to companies that are owned by and hire people of color. The MMSDC, as the nonprofit is known, decertified the Piston Group in February after a protracted fight over the racial makeup of its management team. John Taylor, a professor of supply-chain management at Wayne State University in Detroit, said the Piston Group is big enough to compete without minority designation as long as it remains competitive on cost and quality. Small suppliers will still follow the MMSDC’s rules, because they need the support, he said.