Ford kind of gets it half right

Ford kind of gets it right. Deming says having a small number suppliers with long term relationships builds quality. BrooklynDodger agrees it’s the next best thing to insourcing.

Yet, the restructuring ideas intensify the problem Ford, and GM [and Chrysler too] have: they can’t bring a car to market that people will buy at a price they can make money on. That’s a quality problem in the salaried ranks. Yet, the solution is to cut the salaried worse.


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Ford to slash supplier ranks
Automaker adopts Toyota purchasing model: friendlier, long-term relationships
By Christine Tierney and Bryce G. Hoffman / The Detroit News

Without mentioning Toyota Motor Corp. publicly, Ford Motor Co. is adopting key elements of the Japanese automaker's supplier strategy as part of an effort to cut costs, improve quality and accelerate vehicle development.
"We have a problem in terms of the business model in this industry -- it's not working effectively for our suppliers, and it's not working effectively for us," said Ford's top purchasing manager, Tony Brown, as he outlined an overhaul of the Dearborn automaker's $90 billion annual purchasing program.
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Side bar:
Restructuring moves
Ford took another step to restore profits Thursday by revamping the way it purchases parts. Other recent cost-cutting moves:
• Cut nearly 3,000 white-collar jobs in North America.
• Eliminate 10 percent of contract employees.
• Sell Hertz rental car unit for $5.6 billion.
• Eliminate 2005 bonuses for salaried management employees worldwide.
• Suspend the company's 401(k) matching grant for salaried employees