Crain's Detroit Business
Ford Motor Co. is expected to name Penske Corp. of Detroit to manage shipping and delivery of car parts from suppliers and Ford's parts operations to other Ford plants, industry sources say.
The deal, once complete, would streamline Ford's logistics operation and give Penske a big chunk of one of the country's largest logistics contracts.
Penske would be named the lead logistics provider for Ford's supply-chain network. Neither company would place a dollar value on the contract, but several automotive sources said it is quite lucrative and estimated Ford's logistics spending at more than $4 billion.
Penske would handle inbound shipping of parts for Ford's parts-making group, Visteon Automotive Systems, along with vehicle operations and powertrain operations. Penske also would oversee and critique carrier-supplier performance and freight-bill payments. The deal is not signed, but it is very close, said two industry sources. It likely would be announced during the summer, the sources said.
The deal would be a coup for Penske because the company beat out other large trucking-and-logistics rivals such as Ryder Systems Inc. of Miami and TNT Logistics North America of Ontario, a wholly owned unit of Netherlands-based TNT Post Group, said one of the industry sources.
The contract would go to Penske Logistics, a subsidiary of Pennsylvania-based Penske Truck Leasing Co., a $2 billion division of Penske Corp. In recent months, Penske Logistics has signed similar deals with Whirlpool Corp. and Rite Aid Corp.
Privately held Penske Corp. is the $6 billion company formed by former race-car driver Roger Penske. Penske owns 57 percent of the company, according to a recent filing with the U.S. Securities and Exchange Commission.
Penske Corp. also runs Penske Auto Centers Inc. of Troy, Mich., a chain of 650 car-repair shops across the country. There is also a Penske Automotive Group, a large chain of auto dealerships based in El Monte, Calif.
Penske Corp. also owns Leaseway Auto Carriers, which handles the shipping of finished cars to the dealerships.
Logistics companies such as Penske are becoming more important to the automakers, said Peter Bradley, chief editor for Logistics Management and Distribution Report, a monthly trade publication tracking industrial logistics.
'It used to be that an automaker like Ford just used a trucking company,' he said. 'Now these carriers make runs to the suppliers and then make just-in-time trips to a Ford plant. These lead logistics providers will hire the carriers, manage them, handle freight payments and audits. They manage and oversee everything, including the trucking and warehousing.'