Ford revamps supplier network to cut costs

Ford Motor announced today that it will cut the number of its parts suppliers in half, and negotiate long term supply contracts to reduce costs.
Fewer suppliers under longer contracts will streamline the company's inefficient procurement process, allowing it to reduce purchasing staff while potentially negotiating more favorable terms with its suppliers. The hoped-for result - lower costs going forward. Ford North America lost $1.21 billion before tax in the second quarter.

On the supplier side of the equation, this could be good news for the industry's big suppliers, including Visteon (spun off from Ford) and Delphi, both of which are in financial trouble.