Detroit, MI, October 19, 2006--When auto parts supplier Collins & Aikman Corp., (no affiliation with C&A Carpet) got into a pricing dispute with Ford Motor Co., it knew exactly how to hit the nation's second-largest automaker where it hurts.
On Friday night, the company stopped shipping carpet, instrument panels and other plastic parts to Ford's plant in Hermosillo, Mexico, forcing Ford to shut down assembly lines that make the hot-selling Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized cars.
The stoppage lasted for only one shift, but a Ford spokesman said it "irreparably harmed" the company's relationship with Southfield-based Collins & Aikman, which is operating under Chapter 11 bankruptcy protection.
The stoppage, which Ford said was unprecedented conduct for a supplier, underscores the tension between parts manufacturers and automakers as the Big Three continue to press suppliers for cost cuts in the face of intense competition from Asian car companies.
It also cost Ford about 400 vehicles, which the company said it will be able to make up at the Hermosillo plant even though it currently is running 24 hours per day.
Collins & Aikman President and Chief Executive Frank Macher and Vice President of Engineering and Design Mary Ann Wright are both former Ford executives, and Ford spokesman Paul Wood said they should know the impact of the decision to stop shipments.
"Given their decades of auto industry experience and their decades of experience at Ford, they know full well what happens to a relationship when a supplier disrupts a customer's production or even threatens to do so," Wood said Wednesday.
Ford had to shut down work on a shift that began at 11 p.m. Friday and ended at 6 a.m. Saturday, Wood said. Parts shipments resumed for the next shift and production was restarted after Ford gave Collins & Aikman the price increase it wanted.
Wood said the parts shutdown occurred even though Ford had reached agreement with Collins & Aikman on about 90 percent of the disagreement, including what Wood called a reasonable price increase.
Collins & Aikman spokesman David Youngman said the company would not comment on the dispute, which was reported Wednesday in The Wall Street Journal. But Youngman said the company hopes to continue supplying parts to Ford.
"We value our long-standing relationship with Ford and look forward to building upon our relationship in the future once this issue is behind us," Youngman said.
He would not comment on the possibility of losing Ford's business, which he said amounts to about 25 percent of Collins & Aikman's production.
Many parts suppliers, including Collins & Aikman, have plants on a campus next to Ford's Hermosillo plant, and they ship directly to the assembly plant in real time, Wood said.
The parts stoppage also forced other Hermosillo suppliers to stop production, Wood said.
Collins & Aikman, once led by former Reagan administration budget director David A. Stockman, filed for bankruptcy protection in May 2005. The company hopes to emerge from Chapter 11 by February.
