CINCINNATI – For Tri-State minority and women business owners, Toyota’s announcement Monday that it will vacate its Erlanger operation means more than losing a Fortune 500 headquarters.
It means losing a local leader in supplier diversity efforts.
“They’re considered a national leader in reference to supplier diversity and the minority community,” said Crystal German, vice president of the Minority Business Accelerator and Economic Inclusion at the Cincinnati USA Regional Chamber.
“I don’t see that changing,” she said. “But for our local minority companies, it has been wonderful to have that direct access to the decision-makers and the supplier diversity professionals who were located right here.”
Toyota is one of just three local companies that are members in the Billion Dollar Roundtable, an organization created to recognize corporations that have spent at least $1 billion with companies owned by minorities and women. The other local members are The Kroger Co. and Procter & Gamble Co.
MVP For Local Minority-Owned Firms
The automaker also has been a longtime supporter of the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce and the Hispanic Chamber Cincinnati USA. And it was one of the early supporters of the Minority Business Accelerator, which aims to grow sizable, locally based minority-owned companies.
“Toyota’s been one of the most valuable corporate relationships regionally for minority businesses,” said Sean Rugless, the African American chamber’s CEO. “They have a very strong track record of investing in supplier diversity relationships and community organizations. And they have a very good track record in terms of identifying local spends and local companies to use.”
The automaker also has introduced scores of local women- and minority-owned companies to its largest suppliers through its annual Opportunity Exchange, which has been held in Cincinnati for years.
The two-day event is designed to make connections between Toyota’s direct suppliers and smaller firms that can help those suppliers meet the minority spending goals that Toyota sets for them. It’s resulted in tens of millions of dollars in contracts for women- and minority-owned businesses.
Cincinnati-based Coolant Control, Inc., for examples, has gotten millions of dollars in contracts with Toyota’s direct, or Tier 1, suppliers through the event, said Coolant Control CEO Greg Battle.
“We’re selling a ton to their Tier 1s,” said Battle, whose company makes industrial chemicals and additives.
Rugless said he realized how serious Toyota was about supplier diversity at the Opportunity Exchange during the recession, when the big automakers had lost at least a third of their sales volume.
During that year’s event, he said, Toyota executives pledged that their commitment to spending with minority- and women-owned companies was steadfast.
“It would have been easier for everyone to not do business with the smaller, more expensive small businesses,” Rugless said. “But Toyota maintained its commitment.”
The 25th anniversary Opportunity Exchange will continue this year as planned on Oct. 27-28 at Duke Energy Convention Center in Cincinnati.
But it’s too early to know whether the event will be held here in future years, too, a Toyota spokeswoman told WCPO in an email.
Rugless said he hopes Toyota will keep the event here, event after the company closes its Erlanger operations in the next 24 months or so.
“If it does go, which I hope it doesn’t, we will definitely miss it,” he said.
Move Could Be Challenging For Local Business Partners
Both Rugless and German said they hope Toyota will continue to do business with the local minority-owned businesses that now do work for the company.
“This is business, and if they’re providing that product or that service to Toyota, I don’t see any reason why that would change,” German said.
Battle, for one, said he doesn’t expect Toyota’s move to hurt Coolant Control.
“Toyota moving to wherever they want to move has not affect on my business,” he said. “I hate to see them go. But sometimes people got to go where they got to go.”
Still, Rugless said it could become more expensive for local businesses to service direct contracts with Toyota if they have to travel to an out-of-town location.
And keeping those contracts could become more competitive since the Cincinnati area firms soon will be the out-of-town companies, he said.
Losing Toyota also will make the region a less attractive location for international companies, said Alfonso Cornejo, president of the Hispanic Chamber Cincinnati USA.
“It was a huge asset for us,” Cornejo said. “For all international minded organizations, if Toyota was here, Cincinnati must be a good place.”
But Rugless said he hopes other local businesses will step up to fill the void that Toyota leaves behind.
“A perfect legacy of having a corporation like Toyota in the market is where other people can follow the frameworks and paradigms that they’ve laid,” he said.
Far more Greater Cincinnati
companies are committed to supplier diversity now than there were a decade ago, German added.
“The conversation has expanded, and folks have stepped up and followed the example of folks like Toyota and P&G and Kroger and others in this community,” she said. “I see no reason for that to change. And, in fact, this just adds more fuel to that fire.”
To read more stories by Lucy May, go to www.wcpo.com/may . Follow her on Twitter @LucyMayCincy.