GM was one of the first automakers to implement a supplier diversity program in the 1960s. However, amid the political and cultural shift away from DEI initiatives that prioritize minority-owned suppliers, GM has stopped counting the money it spends on diverse suppliers (which amounted to $8.5 billion in 2023) in an attempt to shield itself from legal troubles.
That’s according to what anonymous sources familiar with the matter told Crain’s Detroit Business, an Automotive News affiliate. The move is a response to a series of executive orders from President Donald Trump that seek to end “illegal discrimination” and restore “merit-based opportunity.”
This doesn’t mean GM has severed ties with any suppliers to reverse any diversity initiatives. It just means the automaker is no longer going out of its way to give preference to minority-owned suppliers and shifting to a more merit-based system. Toyota is undergoing a similar shift.
“I think these orders are pretty clear that the administration means business with respect to trying to eliminate DEI across the board,” Michelle Crockett, a labor and employment attorney at Honigman law firm, told Automotive News. “There’s huge potential exposure there for the automakers and other companies.”
In addition to possible legal troubles, another thing to consider is that GM is a federal contractor. If the federal government, with Trump leading the Executive Branch, is dissatisfied with GM’s DEI policies, it could threaten the automaker’s business with the government.
Another motivation for GM and other automakers to please the Trump administration is the subsidies they’re counting on for building EVs. The Detroit automakers are counting on subsidies promised by the Biden administration to help offset the major costs of its EV investments in recent years.
“There’s no clear road map given as to what may be illegal in this context. It’s all sort of amorphous,” Crockett said. “To be safe, companies are basically conducting what I call equity audits and doing some risk assessments.”
Comment
Excellent! Not necessarily even change the way business is done, just change the why and the keeping track of it. Tracking it is an attempt to justify the expense and possible lack of quality by gaining approval of political sides, not that quitting now is any better, should have resumed now and quit last presidential term. Or never started in the first place.