WINDSOR, Ontario - Ford Motor Co. is going on a Canadian buying spree.
The automaker plans to increase spending among Canadian suppliers 56 percent, from about $3.1 billion annually, equivalent to $4.5 billion Canadian, to about $4.9 billion by 2005.
Buying more parts made in Canada lets Ford take advantage of favorable U.S.-Canadian exchange rates and avoid tariffs on parts exported from other countries, said Alain Batty, CEO of Ford of Canada. It also will help Ford meet its corporate profit goal of $7 billion a year by 2005.
Since 1990, Ford has invested about $6.6 billion in Canada. Recent expenditures include $537 million to expand and upgrade both Windsor engine plants. If Ford of Canada reaches its goal of spending $4.9 billion a year with Canadian suppliers, it still will be a small part of the company's global parts purchases, which amounted to $90 billion last year.
Ford plans to meet its goal by buying more parts from its existing Canadian suppliers and finding new ones.
A supplier doesn't have to be based in Canada, but the parts have to be made there, Ford spokesman John Arnone says.
Ford builds F-series trucks and Windstar minivans in Oakville,
Ontario, and the Ford Crown Victoria/Mercury Grand Marquis and Marauder in St. Thomas, Ontario, as well as V-6 and V-8 engines in Windsor.
In a speech to the Canadian Auto Parts Manufacturers' Association, Batty put quality and costs at the top of his list for suppliers interested in doing business with Ford.
"Quality from the customer's perspective is always the best way to attract our attention," he said. "What we are not asking is to reduce only our costs by asking our suppliers to reduce their margins."
Batty promised that Ford officials would work with suppliers to reduce waste and inefficiencies.
"I can't tell you exactly what will be all the components, but we want to raise the local content because Canada is a good place to buy. We are talking to various suppliers to see what they can do for us," Batty said.
He made his comments at a ceremony at the Essex engine plant in Windsor on Tuesday, April 29, which marked the production of Ford's 100 millionth V-8 engine.