In Canada, the Automotive Parts Manufacturers' Association has told members to "call their bluff" and tell Ford that they won't comply with the demands.
"Ford seems to be looking at what happens next month and the month after that and not what happens three or four years from now," says Gerry Fedchun, president of the association. "If they keep it up, they have a very good chance of being (the customer of last resort) because they're the most difficult to deal with right now. If you have better
choices, you're going to naturally go to the customer that is easier to deal with."
In the United States, the Original Equipment Suppliers Association advises members to give their concerns to Ford in writing. It also says suppliers should request meetings to reconcile those concerns.
In Europe, some suppliers question whether the Ford terms conform to European law. They especially object to a provision that bars them from selling spare parts under their own brand, says Lars Holmqvist, incoming CEO of the European supplier association CLEPA.
Ford purchasing chief Tony Brown was not available for comment, but company spokesman Paul Wood downplayed the friction that the terms have triggered. He says Ford worked with a group of several supplier executives for two years to develop the new contract.
Parts makers should visit Ford's supplier Internet portal to learn more about the contract, Wood advises. Ford has about 2,000 production suppliers and an annual purchasing budget of more than $90 billion, including nonproduction products and services.
"An overwhelming majority of our suppliers have not expressed any concern," Wood says.
But several parts makers say they do object.
"We're basically being told that if we don't accept it, we're going to have some big issues with sourcing in the future," one supplier says.
Such demands run contrary to statements made by Ford CEO Bill Ford and COO Nick Scheele. When Bill Ford ascended to the top job two years ago, he vowed to mend poor relationships with suppliers. And Scheele has talked repeatedly about working more collaboratively with suppliers.
But suppliers say that message has not worked its way down to the front lines of Ford Motor's purchasing organization. Under the direction of Brown and David Thursfield, president of global purchasing, Ford has aggressively pressured suppliers for concessions.
Says the CEO of a Ford supplier: "My lawyer praised Ford for closing every possible loophole. We're responsible for acts of God now."