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Parts suppliers in distress, Ford says

Associated Press / June 25, 2009
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DEARBORN, Mich. - Ford Motor Co.’s top executive for auto parts purchasing says the number of suppliers under distress, bankruptcy protection, or under observation has more than doubled in the past year. Tony Brown declined to give an exact number but said more suppliers are being monitored as slumping auto sales force automakers to slow production and order fewer parts.

Brown said he has several teams looking at ways to aid distressed suppliers operationally, as Ford has limited funds to financially support the ailing companies.

The automaker has pledged to provide at least $125 million in debtor-in-possession financing to a former subsidiary, Visteon Corp., which is under Chapter 11 bankruptcy protection.

Ford said it is accelerating its plans to consolidate the number of suppliers it uses. The company said 850, or 48 percent, will be eligible for future work at the end of the year, down from the 1,683 eligible at the end of 2008.

“We don’t need that capacity,’’ he said. “We need a stronger, healthier, profitable supply base.’’

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