Mulally Calls for Supplier Consolidation

June 17, 2009
Ford chief executive addresses issues facing the auto industry and manufacturing overall during National Summit

Ford Motor Co. CEO Alan Mulally said June 17 U.S. auto manufacturers must help their suppliers consolidate for the overall health of the industry.

"The government put in place some mechanisms to help the supply base through their OEMs, and we continue to work with all of our counterparts, not just Chrysler and GM, but Toyota and Honda because we all share the same suppliers, and the most important thing we can do right now is help them get consolidated because we have this extra capacity, and it's going well," said Mulally when meeting with reporters shortly after speaking at the National Summit economic forum in Detroit. "It's hard work because consolidation is tough. It's the right thing to do."

Although he supports the federal government's decision to provide bailout loans to General Motors and Chrysler, Mulally said he does not believe government involvement in the auto industry should be permanent.

"I believe it was the right thing to do to provide them with temporary support during this horrible economic situation because clearly had they gone into and taken their suppliers into a freefall, Ford would have been dragged down into and we would have dragged down the U.S. economy even further -- and maybe even into a depression," Mulally said.

He also said he believes Ford sales have risen on the strength of the company's product line rather than market share gains related to GM's and Chrysler's bankruptcy filings.

During the conference session, Mulally spoke about the importance innovation will have on U.S. manufacturing's future, including the development of "enabling technologies." But he said manufacturing has been "stymied" by regulation. He called for single standards that would create worldwide regulatory harmonization.

"We have to say enough is enough and get back to freeing people up to commit themselves to these compelling visions," he said.

On education, Mulally said the future workforce needs to learn how to work in multidiscipline teams. Other panelists said it's critical that educators foster an environment that promotes creativity. Educators should not remove the arts and social sciences from curriculum when implementing tougher math and science standards, said Deborah Wince-Smith, president on The Council on Competitiveness.

"We need to have radical reform in schools and not just move around the edges," she said.

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