Thursday, February 09, 2006

Ford Motor Company to outsource to India

In a bid to cut costs, Ford Motor Company (FMC), the world’s third largest car maker, is planning to step up outsourcing of components, engineering services and IT related services from India.

Sources in the automobile industry said, Ford could increase purchasing of components from the domestic market from around $80 million now to $500 million in three years.

Dharuhera (Haryana)-based Rico Auto Industries Ltd is among the several component makers in the country vying for fresh orders from Ford Motors.

The company’s managing director, Arvind Kapur, who was recently in Cologne, Germany and in UK to discuss deals with Ford Motor’s representatives, said that though talks were on, his company was bound by confidentiality agreements and would not be able to discuss specific details.

On January 23, Ford Motor Company had announced its ‘way forward’ plan to restructure its operations that will see net material cost reductions of at least $6 billion by 2010 and reduction in plant-related employment by 25,000-30,000 in the 2006- 2012 time period.

The company will also adopt a lean and flexible manufacturing system, resulting in capacity reduction by 1.2 million units or 26 per cent by 2008.
For details read here.