Ford Motor Company (NYSE: F), and e-STEEL Corporation, the leading negotiation-based e-Commerce exchange for the global steel industry, today announced an initiative to e- enable complex procurement programs with the automaker’s global Tier 1 suppliers. This relationship includes an equity incentive program that will earn the carmaker a minority equity stake in e-STEEL.
Ford selected e-STEEL (http://www.e-steel.com) to provide the steel-specific knowledge and functionality required to rapidly launch a steel e-Commerce procurement system to maximize efficiency and operational savings. Approximately 4-5 million tons of steel and steel-related products will be purchased via e-STEEL for metal stamping suppliers over the course of this contract.
The scope of the alliance covers the automaker’s steel order fulfillment processing, claims, financial controls, and audit reporting throughout its global manufacturing and assembly operations.
“Ford Motor Company has confidence in e-STEEL’s ability to deliver this Internet-based solution across its entire Tier 1 steel and metal stamping value chain, both in North America and Europe, within the next few months,” said Andrew Hinkly, Director, Raw Material Purchasing, Ford Motor Company.
“We selected e-STEEL as our partner due to their expertise in steel procurement systems, their efficient e-business tools such as STEELDIRECT, and their existing broad coverage of our steel supply base,” added Hinkly. “These inherent strengths, and their results-driven management team, will lead to a successful implementation of this program.”
“The mutual focus of the Ford/e-STEEL alliance is that value is job 1,” said e-STEEL Founder, Chairman, and CEO Michael S. Levin. “Our VALUETRACK(TM) process and speed-to-solutions approach will accelerate Ford and its suppliers’ ability to realize substantial operational savings from this program. We are thrilled that Ford Motor Company, which is one of the most innovative global companies, selected e-STEEL for this important initiative.” The automaker expects the members of its steel supply chain to realize cost benefits from efficiencies gained by participating in this program. Ford anticipates the volumes of steel transacted through the program to grow significantly during the next 12 months.
At present, the Ford/e-STEEL alliance is limited in scope to this program for Ford’s purchases, and the millions of tons of steel products a year.
In addition to this alliance, e-STEEL recently announced that it also secured strong strategic alliances with three of Ford’s major steel suppliers, and recent Ford World Excellence Award winners, U.S. Steel, a subsidiary of USX, Dofasco Inc., and National Steel Corporation. e-STEEL also has strategic alliances with Ispat International and Worthington Steel. Currently, more than 2,300 companies from 85 countries representing the key segments of the steel industry are members of e-STEEL.
“Proving value to Ford, and to other global industry leaders throughout the steel value chain in our first eight months, is a tremendous achievement,” said Levin. “This strategic initiative, which adds continuous volume and an important financial transaction processing backbone to our negotiation-based e-Commerce hub, is another major step forward for e-STEEL, and a significant endorsement of our ‘Steel Commerce Solution’ vision.”
About Ford Motor Company
Ford Motor Company is the world’s second largest automaker, with more than 370,000 employees in 200 markets on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Quality Care, hertz and Visteon Automotive Systems.
New York City-based, e-STEEL Corporation (www.e-steel.com) is the leading Internet-based, neutral marketplace for prime and secondary products serving the $700 billion global steel industry. Its electronic commerce solution web site unites buyers and sellers and provides an array of resources for sales and purchasing professionals throughout the steel value chain. More than 2,300 companies, from 85 countries have become members of e-STEEL, representing all of the key segments of the steel value chain.
Founded in September 1998, e-STEEL has 130 employees and additional offices in Chicago, Pittsburgh, Detroit, Atlanta, Brussels, Tokyo, and Singapore. e-STEEL is backed by a blue-chip group of strategic investors led by Goldman, Sachs & Co., and including Amerindo Investment Advisors, Bessemer Venture Partners, DuPont, Dofasco Inc., GE Capital, Generation Partners, Greylock, Ispat International, Kleiner Perkins Caufield & Byers, MSD Capital, Mitsui & Company U.S.A., Mitsubishi International and MC Capital Inc., subsidiaries of Mitsubishi Corp., U.S. Steel Corporation, and Vulcan Ventures Inc.