Business Relationships

Breaking News You Might Not Want To Hear

"Ha um Ford em su futuro!"

That's Portuguese, more or less, for "There's a Ford in your future!"  Good news for Ford, maybe not so much for the North American auto industry.  A Detroit writer has suggested that there may never be another auto assembly plant built in the USA by a domestic manufacturer.  He may not be absolutely correct, but he's definitely on to a trend that may become a movement.

Ford has just built its most advanced assembly plant in the world in Camacari, Brazil.  It's in Bahia, not even in the more industrialized south.  The plant, one of the leanest on earth, shows visible signs of best practices from all over - flexibility in multi-platform assembly; egalitarianism in dress, appearance, and food alternatives; and seamless, nearly invisible, integration of suppliers into physical operations and flows.  All that, and they've got their own port facilities, too.

Defying stereotypes, this isn't one more case of American jobs being lost to low-wage/low-benefit exploited workers in some impoverished third-world outpost.  It is all about the potency of business relationships when their power has been unleashed.

I'm guilty of some level of passion about the potential to do better - lots better - when suppliers and outsourced service providers have been embraced with progressive relationship management programs and practices.  Camacari may provide a global examplar of what I've been feebly trying to illustrate.

Suppliers - outsourced parts and assembly providers - don't merely deliver their goods to production lines just in time in the correct sequence, a common practice in the US, presuming they haven't been driven into bankruptcy.  They put together their products and deliver components and assemblies, in a synchronized flow, to assembly lines.  You can't tell who's Ford and who's Lear or Visteon without looking very closely.  They and their work are totally integrated into overall manufacturing flows.  Just imagine the mutual trust and confidence involved.

The operation is highly automated, with robots galore, adding to quality, speed, and flexibility performance.  How is this possible?  Relationships.  Relationships with the workforce that not only permit, but encourage and celebrate innovation.  Business relationships with suppliers and service providers that not only knock down walls, but act as if they were never there.

These, despite marginal advances on the domestic front, are what we don't have  - and aren't likely to anytime soon - in the domestic North American industry.  We may simply have too much baggage.  The bloody days of organizing the UAW, followed by nearly 70 years of contentious dealings.  The unrelenting cost pressures on outsourced independent suppliers and parts supplier spin-offs.

Replace those with genuine business relationships, and we might have a fighting chance.  But, we're behind the wave.  The future seems to look more like Brazil.  Or, maybe Mexico, where Ford also makes excellent vehicles, and has more-or-less insourced supplier activity by bringing it back from Asia to "near-shore" locations to serve assembly in Hermosillo.

What's your take?  Am I too pessimistic?  Whether or not it's too late for us to take advantage of serious and positive relationship building, is the quality of relationship management a key to global success in this industry?

View the new Ford plant in Brazil.

Comments




  • Art--


    Great piece. I hope you're not too pessimistic but I wonder if there will be new auto manufacturing plants. The place where I see hope is with the new electric cars. Tesla, for example, is building cars in California. It's a very small company but there has been no talk thus far of offshoring. What's neat about Tesla is that it wasn't started by traditional automakers but by Silicon Valley. They had few preconceptions about how a car should be brought to market and, while they are losing a great deal of money, they're a determined group with a great deal of money to use. I know they are supposed to be building a new sedan that will drop the price so that normal people can buy it. I hope so. As I hope that the US will become THE PLACE for building electric cars. JSperry

    jsperry, 3 years ago | Flag

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