Supplier Survey Suggests Ford
Pushes Cost Over Quality
DETROIT AP is reporting that a survey shows that supliers
believe that Ford Motor Co. places more emphasis on cost than quality in choosing suppliers and is the
worst of six major North American automakers in making late engineering changes.
The annual OEM/Supplier Benchmark Study was conducted by Birmingham-based
Planning Perspectives Inc. and includes responses by more than 225 suppliers,
the company said.
But Ford says it is working with its suppliers to satisfy the need to both cut costs and
improve quality.
"The only way we can meet our quality and cost
objectives is working in concert for our mutual benefit and, most importantly,
for our customers," said a statement issued by Ford Wednesday.
"Our efforts have produced some progress and good results but we also are aware that
there is still a great deal more to achieve."
The pinch between having to cut costs while maintaining
quality is a real dilemma, says the head of a supplier trade organization.
"I can't say supplier lower quality because of pricing
pressures," said Neil deKoker, who heads the Original Equipment
Suppliers Association.
"We focus even more on quality to differentiate
ourselves from the pack to maintain our business," he said.
Ford is almost six months into a $9 billion turnaround plan
that includes eliminating 35,000 jobs and closing five plants.
Cost cutting is a major element of the plan. The company
has added 700 engineers to the 300 already working since January to investigate
ways to trim production costs.
The goal is a $700 reduction in production costs per vehicle by mid-decade.
Ford chairman and chief executive Bill Ford
noted in a speech to financial analysts earlier this month that the company
must not produce poor-quality products in its effort to show $7 billion in
annual pretax operating profit by mid-decade.
Indeed, the responses to the survey taken this spring may
actually reflect sentiments regarding Ford still simmering since the days of former CEO Jacques Nasser
who retired under pressure last October, according to one analyst.
"The start of new philosophy didn't occur until
January. They won't have much effect in first 12 months," said Jim Hossack,
an analyst with AutoPacific Inc.
According to the study, Japanese automakers Honda Motor Co.
and Toyota Motor Corp.
are the best automakers to deal with and put the most emphasis on quality.
General Motors Corp. and the Chrysler Group
of DaimlerChrysler AG rank between Ford and Nissan Motors Corp.
according to John Henke, president of Planning Perspectives and professor of marketing at Oakland University.
None of the suppliers contacted would respond to the
partial results of the study. The full results are to be released in mid-June, Henke
said.
Planning Perspectives
is an 18-year old management consulting firm that performs customized research for its clients.
The annual J.D. Power and Associates
initial quality study is scheduled to be released Thursday. The study looks at
problems with vehicles reported by customers in the
first 90 days of ownership.
The study is viewed as an important barometer of an
automaker's overall quality.
In last year's study, Ford
quality stagnated and all the