13 October 2008 | Paul Snell
Chrysler is suing consultancy Accenture alleging the firm falsely claimed it could achieve $900 million (£518 million) in savings over three years through low-cost country sourcing (LCCS) - a target it failed to meet.
The suit, filed in a US court, also claims Accenture misrepresented its knowledge, experience and contacts it had in place to source automotive parts in low-cost countries, including China, India, South America and Eastern Europe. Chrysler is seeking damages from the firm for losses suffered, which it estimates to be "at least tens of millions of dollars", as well as punitive damages and legal costs.
Chrysler criticised Accenture's "complete lack of competency" in LCCS, saying the firm had appeared to come up with lists of vendors "by doing internet searches" and sent out "giant RFQs to random lists of suppliers".
"Accenture's fraudulent representations went to the very basis of its agreement with Chrysler and denied Chrysler hundreds of millions of dollars in anticipated cost savings. While we strive to resolve issues in the normal course of business, litigation is sometimes necessary to provide a solution and move forward," said Chrysler spokesman Mike Palese.
But the consultancy rejected the claims. "Accenture identified substantial savings that could be realised from using lower cost suppliers. At the time the work was done, almost a year ago, Chrysler did not claim Accenture failed to meet its contractual obligations and paid for our services in full. Chrysler's new allegation disregards the facts of the matter and is without merit," said Accenture spokesman Jim McAvoy.