Tony Brown reinforces Ford’s commitment to diverse suppliers

MBN USA recently had the opportunity to talk to Tony Brown, senior vice president, global purchasing, Ford Motor Co. The discussion focused on the company’s continuation of its legacy of diversity and inclusion and how minority suppliers can remain viable in the global environment. He also touched on the future of Ford.

 

MBN USA: As the domestic automotive industry continues to face challenges, its suppliers are also facing challenges. The automotive industry has created the largest community of diverse suppliers, and with Ford’s long history of diversity and inclusion, how is Ford working with minority suppliers to help them remain viable?

Brown: Supplier diversity development remains a strategic priority for Ford Motor Company’s global purchasing organization. In fact, the senior leadership team is given weekly updates on the company’s progress toward supplier diversity objectives.

Through the Aligned Business Framework business model, the company is creating a leaner more efficient supply chain. A number of minority and women business enterprises (MWBE) have been designated long-term, preferred ABF partners.

As of September 2007 our MWBE strategic suppliers included: Evigna, EWIE Co. Inc., Bing Group, Dakkota, Global Parts and Maintenance, Gonzalez Production Systems, Grupo Antolin Wayne, and Prime Wheel. These suppliers have a long-established history in the Ford supply base, and we expect that they will achieve profitable growth and become sustainable enterprises over the long term.

As our business changes, we will continue to identify opportunities for diverse suppliers to migrate to higher value commodity areas.

MBN USA: In a Ford press release issued last October, Armando Ojeda, Ford’s director of supplier diversity development, global procurement, said that while Ford’s Way Forward plan would involve cuts and downsizing, we could expect to see a percentage increase in minority spending despite the fact that Ford’s overall spend in the United States is decreasing. How is Ford able to continue its commitment to diversity despite other cutbacks?

Brown: Ford Motor Company is committed to incremental year-over-year percentage increases in supplier diversity. We have selected a number of MWBEs to become long-term, preferred suppliers. In addition, we are working to build MWBEs that are sustainable over the long term and capable of remaining viable even in tough times.

MBN USA: Ford has achieved unparalleled success with the M-Tier Diversity Reporting System, which verifies MBE and WBE certifications on a real-time basis and provides Ford with the necessary data to assess its impact on diverse supplier sourcing. In fact, M-Tier helped show that in 2005 suppliers in Ford’s value chain generated a combined total of over $13 billion of business with diverse suppliers. How do you expect the continued implementation of M-Tier will assist Ford in maintaining its commitment to diverse suppliers?

Brown: The M-Tier system demonstrates Ford’s commitment to extending supplier diversity to the Tier II level. Ford Motor Company requires that Tier I suppliers report on their diverse spend twice a year. The company then uses this supplier diversity performance information as one of the qualifiers for consideration in future sourcing decisions and eligibility for the company’s World Excellence Awards. Through using the data gained through M-Tier as a factor when making future business decisions, the company is reinforcing its commitment to supplier diversity.

MBN USA: The National Minority Supplier Development Council, the leading organization for minority supplier certification and advocacy of MBEs, has long recommended and encouraged minority suppliers to engage in joint ventures in order to gain the capacity needed to supply goods and services to corporate America. Nowhere does that appear to be more evident than in the automotive industry. Does Ford take an active role in helping MBEs in such endeavors?

Brown: Ford Motor Company is one of the pioneers and leaders in helping MWBEs establish joint ventures with mainstream suppliers. Our supply base currently includes a number of JV’s, among them: Bridgewater Interiors (with Johnson Controls), Dakkota (with Magna/Intier), and Grupo Antolin Wayne. Going forward, joint venture arrangements will be closely scrutinized to assure greater equity in the JV partnership as well as commitment to valueadded growth for the MWBE.

MBN USA: At the New York International Auto Show April 4, your chief executive officer Alan R. Mulally said that Ford had too many dealers in comparison to your competitors. How will the Way Forward plan affect minority auto dealers? How committed is Ford to ensuring that these minority auto dealers remain a viable part of Ford?

Brown: We remain committed to minority dealers and our minority dealer program. Ford is very proud of its track record and will continue to place the right operators in the right dealerships in the right markets.

Tony Brown

Ford continues to have more African-American dealers than General Motors and Chrysler combined.

MBN USA: Outsourcing has affected most corporations, and the auto industry is no different. For example, it has become more commonplace for the Detroit auto show to reveal a Chinese automaker displaying a vehicle it wants to sell in the United States. This year China’s Changfeng Motors showcased several vehicles, small SUVs and trucks at the Detroit auto show. How can Ford remain competitive while facing increasing competition from foreign automakers? How can Ford increase its sales to China and other foreign markets, and how can minority suppliers, minority dealers play a role?

Brown: The company has a plan to return to profitability, and we continue to make progress toward that plan. We are aggressively restructuring our business to operate profitably at lower volumes, accelerating the development of new products that our customers want, deploying our capital wisely and working together toward a common goal.

Ford Motor Company is global and manufactures or distributes automobiles in 200 markets across six continents. When the company announced its second quarter 2007 results, sales in China were up 22 percent in the first half of the year. Growing opportunities in the global automotive market have garnered the interest of many MWBE suppliers, and quite a few have already established partnerships in the growth markets of China and India. This holds especially true for suppliers in component parts and information technology.

MBN USA: The auto industry experienced another shake up with four entities bidding for Chrysler - Kirk Kerkorian, Magna International and two private investment groups. Have private investment firms reached out to help Ford as it transitions with the Way Forward plan? Why or why not?

Brown: Ford Motor Company has the liquidity necessary to fund the business. We are in the process of strengthening our balance sheet and are committed to deploying our capital wisely.

MBN USA: What advice would you give to diverse suppliers as they strive to remain viable and achieve sustainability in the global environment?

Brown: They must ensure that their businesses are structured for profitable growth. MWBEs will not be exempt from the current restructuring taking place in the domestic auto industry. It’s important to recruit and retain experienced, high-quality talent, especially in the key leadership positions of chief operating officer, chief financial officer and chief technology officer.

It’s no longer enough to simply meet customer expectations, MWBEs must anticipate and get ahead of changing customer demands if they are to remain a supplier of choice. This involves delivery of innovation in product and services and technology applications that optimize speed to market, create operating efficiencies and reduce cost.

Diversification of a company’s customer base, product offerings and geography is important in the global automotive industry. MWBEs can improve their chances for long term sustainability by avoiding dependency on one or two customers, offering a variety of related products with service after the sale, and improving cost competitiveness.