DETROIT -- Ford Motor Co. slashed the number of production suppliers eligible for future work by 26 percent -- or 419 companies -- to 1,600 in 2008. But Ford purchasing chief Tony Brown said today that he has more than halfway to go to get to his goal of 750.
Brown wont say when he expects to meet that goal. But given the economic crisis, it will happen faster than previously planned, he said. The industry hasnt seen the peak in the level of distressed suppliers and supplier bankruptcies and insolvencies, Brown said.
We are going to see more, and were going to see more faster, Brown said.
The next six to eight weeks will be especially acute, he said, given the gap in payments to suppliers resulting from widespread industry production cuts late last year and in January.
Ford is aiding more distressed suppliers than in the past, Brown said, including taking over supplier plant operations when necessary. Fords shrinking cash position has not limited the purchasing departments ability to help, he said.
Although Ford generally is not making payments faster, it has made exceptions for companies in danger of not meeting its obligations to Ford.
We send in technical support, we send in operational support, we send in financial support, Brown said. You name it, operationally, well do it. In some instances well accelerate payment terms. So all manner of things are at our disposal to try to help them.
Visteon Corp., which was spun off from Fords parts operation, wont be treated preferentially, he said.
Brown also said he intends to accelerate his Aligned Business Framework program in 2009. ABF is Fords initiative to shrink its supply base by selecting preferred parts makers, giving them more business and working more collaboratively with them.
Ford last announced new companies to its list of preferred ABF suppliers in August, raising the total to 65 companies. When asked whether any new companies had been added since then, Brown said, Stay tuned.