Ford Looks Outside Normal Supplier Realm

Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Ford Motor Co. is beginning to work on joint projects with “not-so-standard” universities and “small companies outside the normal supplier realm” to develop new technology, reveals Barb Samardzich, Ford’s vice president-powertrain product development.

One upcoming product from such collaboration is a direct-injection ethanol power-boost system for a turbocharged gasoline engine, a project initially detailed in March. Ford developed the device in conjunction with the Massachusetts Institute of Technology and Ethanol Boosting Systems LCC, which is linked to MIT.

“MIT and Ethanol Boosting Systems brought us an idea we might not have encountered if we were stuck in our old mindset and listened only to established business partners,” Samardzich tells the Management Briefing Seminars here.

It is part of an overall Ford effort to seek relationships beyond the traditional one between auto makers and suppliers. Samardzich describes such a relationship as essentially a supplier bringing new technologies to an auto maker, which then executes them across a cycle plan.

“Today, we’re sometimes the supplier’s first choice as a partner, and sometimes not,” she says. “We’re working to make Ford the supply base’s OEM of choice for technology introductions.”

In addition to its budding work with universities, upstart companies and small non-mainstream firms, Ford’s other supplier initiatives include “a new generation of joint ventures.” Samardzich says one particularly successful one has been with Getrag GmbH, a German drivetrain supplier.

Ford also is expanding its co-branding efforts with suppliers, such as working with MicroSoft Corp. to develop “Sync,” a multi-media system that will debut on several vehicles in ’08.

Barb Samardzich

“We need to streamline and accelerate our approach to commercializing innovation,” Samardzich says. “We need to speed up the introduction of the technology-leading features customers crave.”

She says Ford product developers are under pressure from tough competitors within the auto industry. But there also is internal pressure due to dramatic cost cutting “in places where we thought we were lean.”

That has led to Ford and other auto makers exerting “pressure on suppliers to shave more pennies off their goods and services,” Samardzich says, and in turn, resulted in “terrible fallout” with some suppliers closing, some selling and some declaring bankruptcy.

As Ford, itself, tries to return to profitability, she says “new ways of partnering – and new sources of ideas – will enable us to use our financial resources more wisely.”

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