Over the past 24 years, Plante Moran has released what it calls the North American Automotive OEM – Supplier Working Relations Index (WRI) Study, which is designed to evaluate the relations between U.S.-based automakers and their suppliers. Over the past few years, Ford has produced some mixed results in that very study, ranking fourth among all OEMs in 2021, repeating that same position in 2022, and then proceeding to drop to fifth in 2023 after losing a rather significant 23 points year-over-year. Now, the 2024 version of the WRI study has been released, and it reveals that Ford suffered another dramatic decline in supplier relations this time around.
Mere days after asking suppliers to help it find ways to cut costs in an effort to make EVs more affordable for the masses, Ford wound up ranking next-to-last on this year’s WRI study with a score of 197. That’s not only a loss of 22 points versus last year’s result, but also, only good enough to beat out Stellantis and its 152 points, ranking The Blue Oval behind Toyota (368), Honda (344), General Motors (299), and Nissan (255).
Ford was the only automaker on this list that didn’t improve its score versus last year, and over the past decade, it has dropped a total of 70 points – ahead of only Stellantis, which has shed 93 points over that same time frame. As a whole, this year’s WRI study found that there are a few issues standing in the way of improving automaker and supplier relations – contract structures need to be updated to deal fairly with the risks inherent in transitioning into EVs, corporate leadership needs to be involved in supplier cost and risk reduction requests, and annual cost reduction requests should incorporate the cost of the total supplier relationship, according to Plante Morgan.
“The primary driver behind the largest WRI point gains is sharing risk and cost in an equitable manner while relentlessly pursuing cost reduction,” said Dave Andrea, Principal in Plante Moran’s Strategy and Automotive & Mobility Consulting Practice. “This will enhance the mutual long-term financial and innovative capability of the customer and the supplier. OEMs doing this best integrate their suppliers into their corporate strategy and keep WRI-related principles front and center in their dealings.”
We’ll have more on Ford’s supplier relations soon, so be sure and subscribe to Ford Authority for around-the-clock Ford news coverage.
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