Engagement with Individual Supplier Facilities: Building Supplier Capability

The primary focus of our work on human rights in our supply chain is building capability among our suppliers to responsibly manage working conditions. This includes meeting legal requirements and Ford’s expectations, promoting sound working conditions in our suppliers’ own facilities and supply chains and encouraging a coordinated, industry-wide approach.

We began this work by developing a training curriculum and approach that we used with Ford suppliers in 17 countries. We recognized from the outset that a joint effort with other automakers would reach a greater number of suppliers more efficiently – as many of those suppliers are shared across multiple automakers – and would ultimately be more successful in embedding a sound approach to working conditions throughout the automotive supply chain. So we initiated a workgroup within the Automotive Industry Action Group (AIAG), a North American member-based, nonprofit industry group specializing in supply chain issues, and we recruited other automakers in North America, Asia and Europe to participate. We now co-sponsor supplier factory-level trainings whenever possible and supplement those with Ford-specific workshops as needed.

At Ford, we continue to focus on the 17 countries we had previously identified as having higher risks of substandard working conditions. Among those countries, locations are prioritized based on production and sourcing trends, sales trends and relative perceived risk based on the input of human rights groups, other companies’ experience and other geopolitical analysis. We periodically review the list of countries. We did not find it necessary to add countries in the most recent review.

The companies at the AIAG discuss and agree on priority locations for the training workshops. Beginning in 2007, the sponsoring OEMs launched joint factory-level training workshops in China and Mexico. All training materials and the overall approach were based on Ford’s prior work. The launch of each series of in-country training involves participation by OEM representatives and Tier 1 suppliers as well as local industry associations and government support where possible.

Whether delivered by Ford alone or with other automakers at the AIAG, the training workshops emphasize the interpretation and application of legal standards and international best practices. By interacting with managers from the human resources, health and safety, and legal departments of participating companies, the workshops provide for a two-way learning experience touching on the areas of interest for each company. The sessions utilize a “train-the-trainer” approach, so as to expand the scope and impact of the training.

While the supplier training sessions are customized to align with the unique laws, customs, cultures and needs of each location, in general they consist of:

• A day-long interactive workshop facilitated by qualified trainers and involving multiple automotive suppliers, in which participants develop and confirm an understanding of customer expectations, local law, best practices and sustainability management systems.
• Verification that the course attendee delivered training on the information obtained during the classroom training to all supplier personnel at each factory and communicated customer expectations to their direct sub-tier suppliers. Ford collects this verification within four months of course completion.

During 2010, Ford independently trained 19 suppliers in Romania. This brings the global total for trained Ford suppliers to 1,655. In addition, with other OEMs at the AIAG, we trained a total of 463 supplier companies in Turkey and Brazil in 2010. The industry total across five countries now exceeds 1,260 suppliers trained. Suppliers trained in 2010 have now moved on to the process of self-assessing their facilities for compliance with local law and Ford expectations, and completing the final stage of the program, which is communication to both workers and their own suppliers on the topic of working conditions expectations.

In 2011, we plan to conduct additional supplier training workshops in conjunction with the AIAG in China, Mexico, Brazil, India, Thailand and Turkey. Training content for these workshops has been expanded to include business ethics and environmental responsibility. Additionally, where possible, these courses will be open to any interested company, and thus Tier 1 suppliers will have the option of asking their own suppliers to attend. The intent is, once again, to increase the scope of impact of the training and push working conditions expectations further down the supply chain.