Ford offers longer pacts to cost-paring suppliers

By Compiled From Wire Service Dispatches With Analysis From Monitor Correspondents Around The World; Edited By Anne Collier

January 6, 1983

Dearborn, Mich.

The Ford Motor Company said it notified its car and truck suppliers that it would award longer contracts to those that agree to increase labor productivity and pass along their cost savings to Ford.

Ford said the longer contracts would be awarded to those of its 2,000 suppliers that agree to raise productivity by as much as 8 percent annually starting this year. Ford is the first US carmaker to seek such an agreement.

Suppliers said ''very few'' of them would qualify for longer contracts under Ford's productivity formula, which Japanese carmakers already use to hold down parts costs.