Half of Ford's suppliers bite the dust

Ford had 1,683 suppliers last year. By the end of this year, that number will be down to 850. This is what Tony Brown, Ford’s group vice president of global purchasing, told reporters, one of them from Reuters. Ford is worried about disruptions by supplier bankruptcies, which are a daily occurrence. Triage time: Ford wants to shore up the healthier ones and leave the not so healthy by the wayside.

“We’ve accelerated our efforts in this regard to try to rationalize the supply base in order to get to profitable growth for all,” Brown said. “There is simply too much capacity in the system. We don’t need that capacity.”

Mass mortality of large suppliers would wreak havoc amongst all automakers manufacturing in North America, including Ford, Toyota and Honda. The supply base is highly intermeshed. Big suppliers are typically served by a large number of subcontractors. The fallout could snowball.

“The next three to four months are going to be critical as GM and Chrysler try to come back up,” Brown said. “As to whether the supplier base will be able to effectively respond to that … we’ve got a critical window here.”