Ford Motor Co. has asked its suppliers to cut the price of parts for 1981 cars by 1 1/2 percent, and auto industry sources say the parts makers will have little choice but to give Ford the discount.
Ford officials said yesterday the plea for a price cut was made in a letter sent a week ago to 1,600 companies that supply the majority of the components for Ford's cars and trucks.
"Without this support, the future market for our vehicles, and in turn, your producers, may be in jeopardy," the companies were warned in the letter signed by Harold A. Poling, executive vice president of Ford's North American auto operations.
Ford officials refused to release the full text of the letter, but said the company had "asked" suppliers to "consider" cutting their prices by 1 1/2 percent effective July 1.
Automakers have asked for and received similar price cuts during previous auto sales slumps, a company official said.
"We are sure the majority will cooperate and give us the support we need," said the Ford spokesman. None of the suppliers has yet made a commitment to honor Ford's request.
Auto parts industry sources said it will be difficult for suppliers to resist the request. Ford buys things like tires, batteries or other auto parts from several different companies. If one supplier cuts its price, the others come under pressure to meet the competition. "There's sort of a bandwagon effect," said one supplier.
Ford outlined its own cost-cutting efforts in the letter to the parts and equipment makers and asked them to "consider sharing a partion of the cost efficiencies they (suppliers) have put in place," the Ford spokesman explained.
A few months ago Ford announced it was cutting its investment in new facilities by $2.5 billion. Several assembly plants have been temporarily or permanently shut down because of the slump in new-car sales.
The latest to close was Ford's Mahwah, N.J., plant, which rolled a two-tone gold Futura off its assembly line yesterday, then closed its doors. In 25 years the New Jersey plant produced 4.59 million cars. Most of them were mid-sized cars, hard hit by the decline in sales.
Nearly 4,000 workers were laid off when the New Jersey plant closed yesterday. Ford already had laid off 60,000 production workers and 6,000 white collar employes.
The number two automaker lost $164 million in the first quarter of this year, and some industry analysts expect Ford's deficit for the year could come close to $1 billion, almost as much as Chrysler's.
Ford officials said the 1 1/2 percent cut on parts prices is "an attempt to help rectify the situation" and reduce Ford's loss for the year. They declined to say how much it would save the company.
A July 1 reduction will affect prices for 1981 models that go into production after the car companies' annual summer vacation changeover period.
Many auto industry analysts expect the car makers to extend the vacation shutdowns this year to help eliminate the supply of unsold autos.