DETROIT -- Ford Motor Co. executives said today that they expect Chrysler LLCs bankruptcy filing to create no immediate disruption to Ford operations.
But Ford purchasing chief Tony Brown told suppliers in a letter this afternoon that Chryslers filing will understandably heighten concern about the viability of the industrys supply base. Brown asked suppliers to contact their Ford buyers if they anticipate problems because of Chryslers filing.
Ford said its teams are monitoring the Chrysler bankruptcy closely. Ford has worked for months to ensure that industry restructuring will not slow its turnaround efforts, company officials said.
Importantly, we share President Obamas hope that Chryslers bankruptcy will be controlled and quick, while we continue planning for all contingencies as a prudent business measure, Ford said in a statement.
Our industry is highly interdependent, and the health of the supply base and dealer network is critical for all automakers.
Ford thinks the Obama administrations automotive task force is focused on the stability of the supply chain, the company added.
On April 24, Ford CEO Alan Mulally predicted that the task force would prop up suppliers if Chrysler or General Motors filed for bankruptcy. Task force members understand that automakers need supplier support to prevent production shutdowns and eventual collapse, Mulally said.
Weve shared with them, and everybody else has, that the supply base is the most important part, Mulally told Automotive News.
Ford is strengthening measures to help distressed suppliers, providing some with financial and technical support. The supply base is stressed out by the current environment, Mulally said.
Ford shares as much as 80 percent of its supply base with Chrysler and GM, Mulally said. To protect itself, he said, Ford has lined up multiple sources for key parts.
Mark Fields, Fords president of the Americas, told Automotive News last week that Ford has set up a war room to monitor Chrysler, GM and suppliers. We have a central area where stuff is up on the walls, he said.
Although Ford is not stockpiling parts to keep its factories running, Fields said, the number of suppliers on Fords critical list is growing. Most every day, another supplier is going bankrupt, he said.
If Chryslers bankruptcy yields better terms from its bondholders and unions, Ford intends to press its own bondholders and unions for the same terms, Fields said. We are absolutely committed to making sure that Ford remains competitive and is not disadvantaged, he said.
Emily Kolinski Morris, Fords North American economist, agreed that supply base disruption is probably the biggest risk to Ford from a Chrysler bankruptcy. But because the Obama task force has provided money for a supplier bailout, she told Automotive News on Wednesday, that concern has lessened in the past few months.
Morris said the bankruptcy could create uncertainty for Ford and its dealers about the resale values of Chrysler vehicles and how to assess trade-ins.
But the fact that this has been handled in a very gradual manner and fairly public manner is helpful, she said. Its helped to take away some of the psychological risk that could have happened if it materialized more in the way that the Lehman Brothers collapse happened back in September.