Facility: A 155-acre site in South Chicago is rapidly being transformed into a supplier park that will supply parts and assembly modules to Ford Motor Co.'s 79-year-old Chicago Assembly Plant. As of April 1, Ford had signed nine-year leases with 12 suppliers. Located on a brownfield site vacant for 40 years, the supplier park is one-half mile from the Chicago Assembly plant, where Ford currently makes the Taurus and Mercury Sable. At the supplier park, which is slated to open later this year and be fully operational in 2004, Ford suppliers will share six buildings and 1.5 million square feet of factory and office space. When the Chicago Assembly Plant begins producing two new vehicles in 2004, the Ford Freestyle wagon/SUV hybrid and the Ford Five Hundred sedan, over half of its external purchases will come from the supplier park. "It will increase flexibility, allow for quicker response to customer preferences, lower inventory costs and help control shipping and capital costs," says Roman Krygier, Ford group vice president for manufacturing and quality.
Development: The supplier campus is a collaboration between Ford and CenterPoint Properties Trust, a Chicago-based real estate investment trust, which is spending $250 million to improve the site. Land ownership is split between CenterPoint (59%) and Ford (41%). The city of Chicago provided $11 million in tax increment financing and the state of Illinois provided a $4.8 million grant for work on the park. Local and state government also has funded improvements to roadways in the area. When it's complete, developers expect the facility to provide at least 800 new jobs.
Strategy: Supplier parks are not new to vehicle manufacturers. In Europe and South America they have helped lower inventory carrying costs, shorten delivery times and generally streamline logistics. With a shorter pipeline, defective parts or assemblies are detected more quickly, which can improve overall product quality. The strategy also supports automakers' move to in-line sequencing, which allows multiple models and configurations to be built on a single assembly line. In North America, the United Autoworkers Union has opposed such supplier parks in the past, contending they tend to transfer jobs as well as work from the OEMs to suppliers that generally are less unionized. To gain the union's support in Chicago, Ford has pledged that the Chicago Assembly Plant will retain all hourly workers for the new vehicle introductions. And while Ford isn't requiring suppliers to be unionized, it is encouraging them to be "union friendly."
Ford Supplier Park Tenants:
- Tower
- ZF-Lemforder
- Brose
- Lear
- S-Y Systems
- Visteon
- Summit
- PSA
- Plastech
- TDS
- Facil
- Pico
