While Chrysler plays hardball with its suppliers, Ford is reforming its supplier relations by sharing technology and standardizing components. Automotive News (sub) reports that Ford will share a variety of its intellectual property with minority-owned suppliers in hopes of developing new products and commercial uses for them. Among the first suppliers to receive assistance in the Joint Technology Framework are Dakkota Integrated Systems, Flex-N-Gate, Gonzalez Production Systems, Grupo Antolin Wayne and Prime Wheel. “We need to support our minority- and women-owned suppliers in moving toward a business model that competes on technology, in addition to cost,” said Tony Brown, Ford VP for global purchasing. The program aims to allow those suppliers “to attract the engineering talent and new sources of capital to migrate these technologies to the next level.” Ford is also attempting to standardize European and American products by sharing as many components across markets as possible. The forthcoming US-market Fiesta will share 78 percent of its parts with its European cousin, while the US Focus will share 90 percent of its parts with the Euro model. Unifying product strategies helps Ford not rely on the approved $25b bailout loans, says Brown. “Our product plans are funded,” Brown tells Automotive News (sub). “None of Ford’s product plans hinge on it.”
“Our product plans are funded,” Brown tells Automotive News (sub). “None of Ford’s product plans hinge on it.”
That’s what I like to hear. Unlike GM, which seems to need the bailout just to keep the lights on a few months longer.
So Ford’s freezing out some suppliers because they’re owned by white guys? How progressive.
“We need to support our minority- and women-owned suppliers in moving toward a business model that competes on technology, in addition to cost,”
What does minority- and women-owned suppliers have to do with a business model that competes on technology, in addition to cost? When a company is flirting with disaster the last thing they need is this crap.
Disappointed in Ford, thought they were getting it together.
“Ford is also attempting to standardize European and American products by sharing as many components across markets as possible.”
Which shows how horribly mismanaged Ford was when it tolerated having some three dozen kinds of seat tracks. We know what the engineers were doing–designing unique seat tracks for each model–but what the hell did the MBA’s do?
Don’t they need to do this across the board instead of just with “disadvantaged” suppliers? I know of a very successful female venture capitalist in Upstate New York who has piles of money and a huge Rolodex, and she gets preferential treatment for some of her portfolio companies because they are “woman owned”. Something is wrong with that picture.
If there are going to be preferences, they should be by socio-economic status, not by skin color or plumbing.
On the common parts thing, I’m an engineer and Ford’s track record there doesn’t make any sense to me. In my work we always looked to reuse existing stuff if possible. Good engineers are just a touch lazy and don’t like doing unnecessary work :). Maybe the decision to make everything custom and unique was made by the boss of the fiefdom who wanted above all else to maximize the size of his or her mini-empire.
How about concentrating on getting minorities and women *jobs* rather than “investment opportunities?”
How about concentrating on giving *everyone* jobs instead of “investment opportunities?”
Though I agree with the idea of collaborating with suppliers and helping them compete in order for Ford to compete better – limiting this to MWBE owned suppliers is unfair. There’s nothing wrong with trying to reward these disadvantaged businesses but not giving them a complete unfair advantage.
A better program would be to work with all suppliers and provide capital to those that show the potential for putting it to good use regardless of skin color or sex.
IMO, the real reason Ford is doing this is to suck up to the government to get that money they don’t need.
Well Lord knows when I buy a car, my primary consideration is whether its parts were supplied by companies that are owned by women, who are the majority gender, or minorities, which don’t include Jews, because they’re a minority, but they don’t count as minorities in a case like this of course … unless they are Jewish women, I guess that would count.
That, and it needs lots of cup holders.
The Big three certainly are not helping themselves when it comes to find new ways to partner in industry. The U.S. Army own 200,000 trucks of some form or another. Guess how many are built by the Big Three? Zero.
I recently got to ask someone in Warren, Michigan about this. He/She said that zero of the Big 3 or their suppliers compete for government contracts. Why, you ask? Too little profit. Generally, government contracting allows for 10 -15% above cost profits as the USG is trying to support domestic companies. When was the last time the Big Three earned 10 to 15% profit?
Now I know why companies like BAE and Osh Kosh are making our militaries trucks and not the Big Three.
Further proof the only Americans currently at war is the military.
hitman1970 has a point. The 2.8 have pulled out of so many business areas it is a surprise they have any left sometimes. Dodge Power Wagons used to be ubiquitous in military service.
John Horner: “skin color or plumbing”. Brilliant!
The list of things that our government classifies as worthy of tracking and rewarding is staggering. How about “cost effective and appropriate”? Nah. Especially not in an election year………
“We need to support our minority- and women-owned suppliers in moving toward a business model that competes on technology, in addition to cost,” said Tony Brown, Ford VP for global purchasing.
The boldfaced text above is key. Am I the only one who keyed on this?
“in ADDITION to cost”, as in “ADDITIONAL cost.” It sure sounds to me as if they are seeking additional cost.
And yes, who would want to pursue government contracts? I worked for an aerospace defense contractor years ago, long before Sarbanes-Oxley and ISO 9000.
We made water hoses for cars, trucks, tanks, and helicopters. The hoses were typically transported by truck or train on giant reels. But any hoses destined for a government customer were not allowed to be wound onto reels. There was no valid technical reason for this. It did not result in a shorter life expectancy for our products, yet we had no choice; this was written into all of our government contracts.
So we had to employ longer trucks or rail cars for these products. It raised our cost, which of course, we always passed on to the customer. That’s you, you, and you, taxpayers! Today, companies have hundreds of similar useless regulations that they have to follow. If I ran a company, I would probably seek to AVOID interaction with government customers. A lot of companies feel the same way. Too much regulation, too much effort must be spent in “contract breach avoidance” efforts.
Ford like other large companies has no choice but to emphasize minority/women owned companies or they will have the Feds on their back. If you look at all the boilerplate crap on ANY contract with a large company you will find this crap.