02 February 2006

Ford Motor Company plans to reduce its supplier base by almost 70 per cent in the next few years.

Last year it planned to halve the number of its global suppliers in a bid to get better technology at lower prices. But last week it revised this figure when it announced its intention to reduce the number of its suppliers from 2,500 to 800.

It will also cut between 25,000 and 30,000 jobs and close 14 plants in North America. Bill Ford, chairman and chief executive, said "painful sacrifices" were needed to secure its future.

He said the company's North American operations had been struggling against competition from Asia and experiencing high-labour and raw material costs.

It has said 27 preferred suppliers will receive more business, including Johnson Controls, Dana Corporation, Lear Corporation and Visteon. The company would not say which suppliers it intends to drop.

SMfeb2006