Ford Asks Suppliers to Help it Cut Costs


ford asks suppliers to help it cut costs

Ford has reported significant losses on its EV business, and a letter obtained by Crain’s Detroit Business/Automotive News shows that the automaker is looking to cut costs with its suppliers. The Blue Oval asked its partners to help lower materials costs, saying “we have all invested heavily in the success of the EV business, and we will all win or lose together.”

Ford’s memo included mention of Ford’s current EVs, including the F-150 Lightning, Mustang Mach-E, and E-Transit, as well as two new ones, the P800 electric truck and large electric SUV. The automaker wants any and all cost-cutting ideas from suppliers, even if it had previously rejected the suggestion. “Everything is on the table,” the letter said.

The request targets suppliers of all sizes, including small ones that are less able to weather the ups and downs of the EV business. Some suppliers have been burned by Ford’s EV plans, which were scaled back after the company realized customers weren’t as hot on electrification as hoped.

Large suppliers have long cited EVs as being a big problem for their operations, with Magna’s CEO saying that changes in production volumes have been a drag. They also noted that some automakers have been paying up front to help mitigate some of the risk of investing in the business. To be fair to Ford, it’s far from the only automaker slashing costs. Automotive News noted that Stellantis and GM have also been on a tear, with the former suing some suppliers for their prices and business practices.

[Image: Shutterstock]

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