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To: TobagoJack who wrote (24832)	11/1/2002 3:11:44 AM
From: elmatador	Respond to of 74559

Don't blame China: Ford to slash parts costs by 15% It is the industrialized countries who started squeezing suppliers for cheap parts forcing them to go and find places where manpower is cheaper. Remember Japan spreading industrialization over Asia shipping industries Japan had priced out of the market due to inflated costs of producing most things in the country. China, is embracing all those businesses searching for a cheaper place to produce. This is the example of many countries should have followed: Export his way out of poverty. Just note that the cheaper production abroad subsidized the fat cat work forces of the soon to be de-industrialized world. Ford to slash parts costs by 15% By Jeremy Grant in Detroit Published: November 1 2002 0:29 \| Last Updated: November 1 2002 0:29 Ford Motor on Thursday opened a new front in its 10-month restructuring effort by revealing that it aimed to cut its $35bn (£22.4bn) parts bill by 15 per cent within two years. The disclosure signals a dramatic acceleration of Ford's cost-cutting programme, which investors have criticised for not going far enough. The programme aims to restore the world's second-largest motor manufacturer to annual profits by mid-decade. The move is also the first sign of the aggressive approach being taken by David Thursfield, former chairman of Ford Europe, since he arrived at the company's US headquarters in August to take charge of global purchasing. "I would be very disappointed if we didn't take 15 per cent out of [the parts bill] in the next two years," Mr Thursfield said. But while the fresh cost-cutting drive could save $5bn from the production budget, he warned this was "not a net figure" and would be partially offset by extra regulatory costs such as new emissions standards. Mr Thursfield said that savings would be achieved by engineers and purchasing staff collaborating to ensure that more of the same parts were used in different vehicle models. The process - dubbed team value management (TVM) - was pioneered by Mr Thursfield in Europe and mirrors existing practices at Japanese rivals. Ford said TVM should enable vehicles to be designed so that 40 to 50 per cent of components and bodies could be used again in the design of future products. It would also phase out the decades-old practice under which executives in charge of product development for each model would order parts to their own specifications, so draining purchasing budgets. For example, Ford would cut the number of types of front seat by 2007 to seven from the current 23. Parts suppliers have come under severe pressure from Detroit's big three car makers - including Geeneral Motors and DaimlerChrysler - to cut prices as the industry struggles with overcapacity and competition from nimbler Japanese rivals. However, Mr Thursfield played down his plan's impact on suppliers by insisting the effort would be collaborative. "Rather than hit our suppliers over the head, there is so much waste we can both go after, so there's no need for an arm wrestling match on margins." Ford has already started work on the cost-cutting drive, which will be widened to cover Ford's entire model range including its Mazda subsidiary and Volvo, part of its luxury stable.