Johnson Controls has been working with Ford on sustainability opportunities for a number of years. It became clear that both companies were advancing the same goals of improved supplier ethics and enhanced working conditions.
Ford was our first major automotive customer to take a proactive approach toward working conditions all the way down the supply chain. When Ford conducted a working conditions audit at our manufacturing plants in Mexico, it helped make the case at Johnson Controls that our efforts on working conditions in our own supply chain are not only the right thing to do but important to the business – because it's important to our customers, employees and shareholders.
It is abundantly clear that the entire industry must work together to enhance working conditions and cascade these concepts through the supply chain. One of our roles as a tier-one supplier of automotive parts is helping the second- and third-tier suppliers understand the need for, as well as the value of, better working conditions.
There are about a dozen major auto manufacturers in the world today, and another dozen manufacturers that are emerging in low-cost countries. From a supplier's perspective, if all of the manufacturers subscribe to the same human rights policies, we can respond with one common program. It makes the whole cascading process that much more efficient and valuable, and it makes it that much easier to get sub-suppliers to participate. Ford has clearly been a leader in asking the tough questions and encouraging the industry to work together.
We have found that in many emerging supply bases – and in lower-cost countries, especially – there's a lack of awareness of local human rights laws and working regulations. It's not because people don't want to know about them. Rather, it's that enforcement is not as strong as in the United States, Japan and Western Europe. That's why we worked with Ford to host a training session for automotive suppliers in St. Petersburg, Russia.
The benefits of a healthy supply chain are enormous. The happier your employees are, the longer they will work for you. That's not just in developed countries, but everywhere. And reduced turnover saves money. Safer working conditions also saves money – in medical costs and even in tangential litigation expenses. It takes money to implement these programs the right way, but we believe there are significant gains in the long run.
David Duesterberg
Director Health, Safety and Environment for Automotive Experience North America
Johnson Controls, Inc.
