Automotive Giant's Demands For Cutting Costs Could Spell Good News For Powder Metallurgy In what might spark a trend among automobile companies to seek suppliers who can provide less expensive materials and processes — while still holding true to quality — Ford Motor Company announced at a meeting with its 100 largest suppliers last December that it's demanding 3.5% price reductions. Focusing on vendors whose prices top a global benchmark price, Ford encouraged its suppliers to cut costs through conversions via less expensive materials and processes. Ford has touted a system called "team value management," where it works with suppliers to find more economical alternatives rather than simply demanding a price reduction. According to Jim Padilla, Ford's Executive Vice President and Head of the Americas, the move comes in response to Ford's finding that in most cases, its parts were 10% to 20% more expensive than the industry standard for a particular part. Ford's previous cost-cutting efforts on overhead and other non-production costs over the past 18 months have yielded nearly $1.5 billion in savings. It illustrates the kind of savings the company seeks on parts, raw materials and other production costs. It is also expected that other automakers will follow Ford's lead and initiate similar plans in 2004. Cost-Cutting Measures Perfect For P/M
While demands for lower prices usually elicit groans from vendors, Ford's move could be a boon for companies specializing in powder metallurgy (P/M). Many industries have found P/M parts to be an economically viable alternative to other traditional metal processes like machining and die casting. Typically using more than 97% of the starting raw material in a finished part, P/M processes such as Metal Injection Molding (MIM) are energy and materials conserving. Because of its processes, P/M eliminates or minimizes machining and the subsequent labor costs involved, as well. In fact, P/M facilitates the manufacture of complex or unique shapes which are impractical or impossible with other metalworking processes. In the case of mass production on a scale of the automobile industry, P/M is especially well-suited as a cost-effective means of producing simple or complex parts requiring long-term performance reliability in critical applications at production rates that can reach several thousand parts per hour. It can be expected that many industries, looking to cut production costs in a tight market, may turn to P/M for answers. In addition to P/M's cost-effective method of forming precision net-shape metal components, it also improves industrial productivity by eliminating manufacturing steps and provides automation, precision and special properties such as self-lubrication and controlled filtration. So while the current state of cost-cutting measures by industries across the board may be cause for concern for many in the metals industry, for P/M it may prove to be an opportunity for growth. Compiled from wire reports and other media sources. For further information and updates, please visit the following websites: http://www.MPIF.org/ http://biz.yahoo.com/rf/040106/autoshow_ford_costs_2.html | 
