French suppliers will have a chance to gang up on Ford of Europe on 9 July.
Suppliers will meet with the company in a rendezvous arranged by FIEV (Fédération des Industries des Equipments pour Véhicules), the French suppliers organisation.
Supplier companies in France, both natives and subsidiaries of companies based elsewhere, confirm the results of the SupplierBusiness.com survey of auto parts suppliers that Ford is the most difficult to work with.
The Ford Production Purchasing Global Terms and Conditions contract, introduced 1 January 2004, is the specific element that elevates Ford to the “least-liked” position.
Jacques Monnet, executive director of FIEV, says suppliers are especially concerned about language involving intellectual property rights, and Ford’s insistence that it can show supplier drawings to competitors.
The most damning accusations against Jose Ignacio Lopez when he was in charge of purchasing at General Motors in the 1990s were that he took supplier drawings representing their creative work to competitors and asked them if they could do it cheaper.
Suppliers don’t want a customer to co-opt their inventiveness by claiming the right to pass their drawings and ideas to other suppliers for quotations.
That practice of Lopez resulted in far more supplier anguish and harsh criticism than tough negotiation or cost-cutting ever did.
While Ford claims that it has merely made clear what other automakers have in their contracts in a vague way, the French suppliers disagree.
“The general conditions in force are largely more respectful of the intellectual property rights of suppliers,” says Monnet. “Negotiations always remain difficult. However, you can say that in a general fashion, the European makers and notably the French are less adventurous in moves to violate the intellectual property rights of suppliers.”
Galling to the French
Monnet says most automakers, when updating or changing their general contract with suppliers, consult them first. Ford, he says, just delivered the new contract as a fait accompli, which was particularly galling to French suppliers whose primary customers, Renault and PSA, don’t do that.
None of the French suppliers, including Top 10 players Valeo and Faurecia, are thought to have rejected the contract as Bosch did. Monnet had no comment on the question.
The VDA in Germany, which represents both suppliers and German automakers, has analysed the document and sent Ford a letter of protest.
The Ford document also says Ford has the right to set off against a supplier’s receivables from the Ford Group any amount owing to the Ford Group by the supplier’s related companies, which includes parent companies and subsidiaries in which the supplier has voting rights of 25% or more.
In Canada, Decoma International, a Magna group member, says in its annual report that it would contest Ford if it tries to interpret the global terms and conditions in a way that would try to set off a Magna Group liability against Decoma receivables.