Suppliers revolt against Ford

Cologne. The German Automobile Association (VDA) has demanded that Ford Motor Company revise its purchasing contracts significantly.

The VDA says some of Fordís conditions contravene European Union antitrust law and are wrong under German law.

In recent weeks, the US auto giant has repeatedly asked its German suppliers to sign the "Ford Production Purchasing Global Terms and Conditions" (PPGTC).

The new guidelines should have come into effect Jan. 1, 2004 but talks between the VDA and Ford were earlier stopped by Ford without having reached a result.

A legal committee formed by suppliers drew up a "position paper" in late March and this was sent to Tony Brown, Ford's purchasing director. The paper accuses Ford of passing on all costs and risks to its partners.

According to the PPGTC, suppliers will be in future be liable for the costs of any recall campaigns that are the result of faulty components. They would be liable for all costs without any time limit. They would also have to pay for any image loss for Ford that would result from recall campaigns.

On the other hand, suppliers are strictly forbidden to sell parts for Ford vehicles under their own name on the free market -- which is explicitly allowed under new block-exemption rules.

Some suppliers, therefore, are considering complaining about the "straightjacket contracts" to the EU commission. Lars Holmqvist, the designated boss of the European component manufacturer association Clepa, supports them: "I have never seen something so one-sided during my whole working practice."

Both Ford and VDA boss Bernd Gottschalk did not want to comment further on the dispute. They said they prefer to talk in private to find a solution.

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