German suppliers revolt against Ford Motor

By Klaus-Dieter Floerecke, Automotive News Europe

Cologne, Germany-The German Automobile Association has demanded that Ford Motor Co. make major revisions to its purchasing contracts.

Some of Ford's contract provisions violate European Union antitrust law and are wrong under German law, the association claims.

In recent weeks, Ford repeatedly has asked its German suppliers to sign the “Ford Production Purchasing Global Terms and Conditions.”

The new guidelines were supposed to take effect 1 Jan, but Ford and the association were unable to reach agreement.

A legal committee formed by suppliers has sent a position paper to Tony Brown, Ford's purchasing director. The paper accuses the automaker of passing on all costs and risks to its vendors.

According to Ford's contract, suppliers would be held liable for the costs of any recall campaigns that are the result of faulty components.

Suppliers would be liable for all costs without a time limit. Vendors would have to pay for any image loss for Ford that resulted from recall campaigns.

Suppliers would be forbidden to sell parts for Ford vehicles under their own brand on the aftermarket. That provision clashes with Europe's new block-exemption rules, which permit suppliers to do so.

That's why some suppliers might complain about the “straitjacket contracts” to the European Commission.

Lars Holmqvist, chief of the European component manufacturer association CLEPA, supports the suppliers. “I have never seen something so one-sided during my whole working practice,” he says.

Both Ford and Bernd Gottschalk, chief of the German Automobile Association, declined to comment further on the dispute. They said they prefer to talk in private to find a solution.