Ford announced July 25 it is expanding a program that requires parts suppliers to share warranty costs, according to the Detroit News.
The newspaper said that Ford launched a warranty cost sharing pilot program in 1998 with seven top suppliers.
Ford to Extend Warranty Cost-Sharing Program
by Staff
July 25, 20021 min to read
After achieving some cost savings, the company told top suppliers in a memo distributed last week that it is now expanding the program across nearly every part that can affect its three-year, 36,000-mile bumper-to-bumper warranty on new cars, the Detroit News said.
David Velliky, Ford's director of supplier technical assistance, told the Detroit News that, by the end of this year, about 70 suppliers will be participating in the program.
For savings over 5 percent annually, the Detroit News said suppliers will share 25 to 50 percent of the improvement but would be charged 50 percent of any increase in warranty costs attributable to defective parts.
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