Supply Chain

Ford’s suppliers are critical allies in helping our Company to achieve success in the marketplace and meet our sustainability goals. We promote long-term relationships with our suppliers and seek alignment with them on sustainability-related issues such as greenhouse gas emissions management and human rights.

The basis of our work with suppliers is the Ford Code of Human Rights, Basic Working Conditions and Corporate Responsibility. This Code was formally adopted in 2003 and applies to our own operations. We also seek to do business with organizations that conduct their businesses to standards that are consistent with this Code, and we encourage our $75 billion supply chain2 to adopt and enforce similar codes. Ford’s Code of Human Rights, Working Conditions and Corporate Responsibility addresses workplace issues such as working hours, child labor and forced labor, as well as nondiscrimination, freedom of association, health and safety, the environment and other issues.

We work to ensure that Ford and our suppliers have management systems in place to mitigate potential risks, ensure continuity of supply and improve the overall sustainability of the complex global automotive supply chain. Our aim is to leverage our supply chain – and our industry – to make a positive impact in the markets in which we do business.

We take a three-pronged approach to engagement with suppliers on sustainability issues:

• Building Capability at Individual Supplier Facilities: We work with suppliers to encourage the management of sustainability issues. We conduct supplier training supported by assessments and remediation at individual factories.
• Engaging with Strategic Suppliers: Ford and our strategic production suppliers work together at the corporate level to align and enhance approaches to a range of sustainability issues.
• Collaborating with Peers in the Automotive Industry: To achieve truly lasting change, we are leading work with our counterparts in the automotive industry, through the Automotive Industry Action Group (AIAG), to develop common approaches to a full range of sustainability issues.

Accomplishments

In 2011, our human rights and environmental responsibility accomplishments in the supply chain included the following:

• Together with other automakers through the AIAG, we trained 387 supplier companies in India, Mexico, Turkey and Brazil. Of these, 111 were Ford suppliers. The industry-wide total across five countries now exceeds 1,500 suppliers trained. To date, the global total for Ford suppliers trained through both industry-wide training and Ford-specific training sessions now exceeds 1,750.
• We surveyed 128 suppliers representing nearly 60 percent of our annual purchases regarding greenhouse gas emissions, and we achieved an 86 percent overall response rate. More than 50 percent of respondents said they publicly report their emissions.
• Ford has driven industry action at the AIAG to address the need for common guidance and tools in the automotive industry and beyond for responsible sourcing from conflict-affected and high-risk regions.

Ford feels strongly that cooperation within industry, as well as with multiple stakeholders, will be required to effectively address the human rights and environmental impacts of mining and other raw material production processes. Due to the depth and breadth of the automotive supply chain, supplier engagement is critical and must be pursued by individual automakers and collectively as a global industry. In 2011, we have actively engaged suppliers through communications, training, events and workgroups.

This section provides background on our relationships with our suppliers and details our supply chain work to support human rights, promote environmental sustainability and explore human rights and environmental issues related to raw materials. We also detail our efforts to promote diversity among our suppliers.