Each year the three U.S. automakers collectively purchase nearly $120 billion in supplies and services from other companies in the private sector. A major concern to both the automakers and the Government has been the share of these dollars directed to minority businesses.

In 1993, General Motors Corporation, Ford Motor Company, and Chrysler Corporation instituted a program to further their commitment to minority business. They called this program "Tier 1/Tier 2" to reflect a key feature of the program - namely, that large business suppliers to the automakers (considered Tier 1) would be required to make the same commitments to minority business as the automakers themselves. This has enabled more minority-owned businesses to become subcontractors and suppliers to the automakers' Tier 1 suppliers and to participate more fully in the subcontracting opportunities of the automotive industry.

On February 19, 1998, Small Business Administration Administrator Aida Alvarez signed an agreement with the big three automakers that recognizes the Tier 1/Tier 2 program and sets forth the specific objectives, in dollars and percentages, for each company. The agreement also sets forth the reporting requirements, defines the minority business entities that can participate, and clarifies the role of SBA. It requires the automakers to target outreach efforts towards the inclusion of companies certified under the Section 8(a) Program; and it mentions, in a more general way, the automakers' support for SBA's initiatives for women-owned small businesses.

If you are a Tier 1 or Tier 2 supplier, BTW can help you to meet your minority business requirements. Fill out a request form and see how we can help you today.