TORONTO -- Wescast Industries Inc., in response to an Automotive News article, said it would focus on customer demands for lower costs amid speculation that it could lose $50 million in Ford Motor Co. parts orders to cheaper Chinese firms.
In a statement released Tuesday, Wescast said its customers had been asking it cut costs to remain competitive.
"Wescast has previously indicated that its customers have outlined aggressive costs targets which must be achieved in the future if Wescast is to remain competitive with offshore competitors, including those in China in particular," Wescast's president Ray Finnie, said in the statement.
"Wescast continues to discuss and evaluate these cost targets with its customers so that it can respond appropriately in the future."
Automotive News said Wescast, based in Brantford, Ontario, stood to lose millions of dollars in parts orders this year as Ford shifts orders to much cheaper Chinese factories. Automotive News reported that parts companies like Wescast are being pressured by the carmakers to set up shop in China where labor costs are lower.
Wescast, which reported sales of C$125.2 million in the first quarter of this year, said in a news release it had not received any formal notification from Ford.
"As Wescast has previously noted, it is very clear that Asia is emerging as a significant marketplace for automotive OEMs (original equipment manufacturers) and parts suppliers. The OEMs are encouraging increased content levels from Asia in order to reduce costs," said Finnie.