Surge in auto production impairs quality of parts: Ford executive

Mon Oct 21, 2013 4:00pm EDT
 
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By Deepa Seetharaman

Dearborn, Michigan (Reuters) - The recent surge in U.S. auto production is hurting vehicle quality because automotive parts suppliers have less time to fix problems that emerge on the line, Ford Motor Co's (F.N: Quote) new global purchasing chief told reporters on Monday.

Hau Thai-Tang, who led the overhaul of Ford's Mustang sports car in 2005, also said the No. 2 U.S. automaker is exploring a cost-cutting strategy that requires Ford to tweak the design of its global models for specific regions.

Auto parts suppliers, which closed scores of factories during the financial crisis, are operating around the clock to meet consumer demand for cars and trucks that is marching toward pre-recession levels.

"Everyone is running flat out and it's contributing to some of the quality challenges that we've seen," said Thai-Tang, who oversees Ford's $100 billion global budget for everything from raw materials to marketing to paper towels.

U.S. auto sales are on pace to reach 15.6 million units this year, according to J.D. Power and LMC Automotive. Many analysts expect auto sales to exceed 16 million vehicles in 2014, possibly topping the 16.1 million vehicles sold in 2007.

J.D. Power and LMC forecast that U.S. auto production will rise 3 percent to 16.5 million next year.

To meet increased demand, suppliers have less time to do preventative maintenance on their equipment because the are working to meet rising U.S. vehicle demand, Thai-Tang said,

One of Ford's vehicle programs has a "yellow" rating, meaning that too many suppliers are operating at full tilt, Thai-Tang said, without naming the vehicle. In the past, Ford executives have said supply problems hampered the launch of the Lincoln MKZ sedan.   Continued...