How Ford started to turn around relations with suppliers

Vienna, Austria - Ford Motor has changed several policies to rebuild supplier relations damaged when Ford imposed unpopular new terms and conditions in 2004.

It seems to be working. In the second annual Automotive News Europe /SupplierBusiness OEM Relations Survey, suppliers rated Ford significantly higher than in 2005 when it was last, although Ford is still low compared to rivals.

Globally, Ford named 40 partsmakers as preferred suppliers.

"We would like to work with fewer suppliers, but create for them a greater scale, earlier involvement and making their investments more efficient," said Birgit Behrendt, vice president of purchasing for Ford of Europe.

Ford is adding more suppliers once only used by Ford's Premium Automotive Group brands - such as Swedish safety specialist Autoliv - said Albie van Buel, Volvo senior vice president for purchasing. Ford lets each brand purchase specific components to assure brand uniqueness.

"Our challenge is to source with Ford's preferred suppliers without missing innovation," van Buel said.

Lars Holmqvist, CEO of European supplier association CLEPA, acknowledged that Ford's relationship with European suppliers is improving. "They moved up thanks to the effort of PAG brands including Volvo," he said.

"Ford is trying very hard to improve its relationship with suppliers," said one Ford supplier. "It is getting better now."

From Automotive News Europe (A Crain publication)