Ford Motor Co. will develop special partnerships with a select group of suppliers in its bid to keep production costs steady for the rest of the decade, a company official said.
Ford expects to have 1,150 suppliers for automotive operations by the turn of the century, said Jacques Nasser, group vice president for product planning. Plans also call for 100 suppliers per vehicle line and 60 per engine and trans-mission.And by 1996, Ford will equip 90 percent of the vehicles it sells in North America with engines designed to be "tune-up free," requiring only fluid and filter changes for 100,000 miles.
The plans are an outgrowth of Ford 2000, the company's global reorganization initiative aimed at greater efficiency and competitiveness, Nasser said in a speech at the University of Michigan's annual automotive management briefing.
"Ford 2000 prepares us for an ever more challenging environment," he told an audience of about 900 suppliers, consultants and other industry insiders. It is "a fundamental rethinking" of the way the company does business, he said.
A major element of the program is a previously announced goal of freezing the cost of developing new cars at 1995 levels for the rest of the decade. The company has a cost-saving target of $2 billion to $3 billion, or about $700 per car.
The savings will involve all aspects of company operations, from better design to lower material costs to eliminating development duplication and even better investing, Nasser said.
But he emphasized working with suppliers, especially those in the new partnerships, to hold down the costs of parts. "We will be involving suppliers earlier in the development process and entrusting them with more design and engineering responsibility," he said.
Despite Ford's determination to cut costs, speed up product development and develop more efficient, team-oriented operations, the improvements might not translate into lower car prices for consumers any time soon, Nasser said.
"If you want to put it really bluntly, it may not affect the consumer at all," he said. "I believe prices are set by the marketplace and set by competition.
"We can't control prices, but we can certainly get a handle on our costs."
Other automakers are making similar efforts, and if the industry becomes more cost-efficient "we'll all win and the customers will win and the market will grow," Nasser said.