GENEVA -- Ford Motor Co. has added two additional suppliers to its list of preferred suppliers.
ThyssenKrupp Automotive and Tenneco Inc. have joined Ford's list, said Jim Padilla, Ford's president. The list has grown to 29 companies since Ford announced the program in September.
Under the program, Ford is trying to whittle down its number of global suppliers and build closer working relationships with those that remain.
In the first phase of the program, Ford has identified 20 global commodities that make up roughly half its annual global purchasing bill, according to Ford spokesman Paul Wood. For each of the commodities, Ford will rely on just two to four suppliers, said Wood.
The first phase is targeted for completion by the middle of this year. Ford hopes to trim the number of suppliers by 50 percent in those 20 commodities to 100 or fewer.
Ford currently spends around $70 billion annually on global production parts. It has more than 2,000 global production suppliers. Ford wont say how many suppliers will be left by the time it fully implements its preferred supplier program.
But the cuts are expected to be drastic. Ford intends to finalize the components covered by the programs second phase this year. In 2007, it will name the suppliers chosen to produce those phase-two components. Ultimately, 60 to 80 percent of the $70 billion global parts buy will be assigned to vendors on Fords list of preferred suppliers.
ThyssenKrupp Automotive AG ranks No. 16 on the Automotive News list of the top 100 global suppliers with fiscal year worldwide original-equipment automotive parts sales of $9.02 billion in 2004.
Tenneco Automotive Inc. ranks No. 43 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $3.22 billion in 2004.
Amy Wilson contributed to this report
You may e-mail Bradford Wernle at [email protected]