Motor manufacturing giant Ford is to provide training on social and environmental matters to all its suppliers worldwide.
The US-based multinational said the training would supplement a growing
number of assessments of supplier factories against its ethical code of
conduct. It will draw on lessons learned by the company from a pilot
programme carried out over the past two years, as well as advice from
external advisers and non-governmental organizations.
There is no strict timetable, but Ford plans to extend the initiative
to every country in which it has a supplier. More than 2000 companies
supply the manufacturer with a total of 130,000 vehicle parts. A
further 9000 firms supply non-vehicle goods and services such as
machinery and computers.
Much of the training will be on what Ford defines as ‘human rights’
issues such as working hours and overtime, harassment and
discrimination, health and safety, wages and benefits, and freedom of
association.
The company’s main suppliers in Mexico and China, which are seen as
higher-risk, will be the first to receive the training. With an annual
global spend of $90billion (£52.4bn) and suppliers in more than 60
countries, 30 of them in emerging markets, Ford’s supply chain is one
of the largest and most complex in the world.
The company’s suppliers were put on notice this spring that ethical
supply chain management would become a strong theme for the company
when chief executive Bill Ford stressed the importance of workplace
standards to 100 main suppliers.
But the manufacturer believes progress on supply chain ethics is
practical only if a significant number of automotive companies work in
concert. As a result, Ford has begun talking to the Automotive Industry
Action Group – a US-based not-for-profit business association – about
bringing companies together to discuss common requirements on working
conditions ‘and to explore the opportunity for industry collaboration’.
Ford said it hoped this would ‘result in an industry working group that
would be able to combine resources and experience to generate common
standards, tools and training for the automotive industry’.
Ford’s pilot assessment and training began in late 2003. By June 2005,
the inspection and verification firms SGS and Intertek Testing Services
had completed 100 third-party assessments of suppliers in Mexico and
China.
The assessors found a ‘wide range of general health and safety issues,
including inadequate emergency systems’, and in some instances a
failure to pay correct overtime wages or the local minimum wage and
social insurance. There was one case of underage working and several of
young workers doing hazardous jobs. Ford said all suppliers had been
asked to take remedial measures and had responded positively.
Over the next year, Ford will be working with the US-based CSR
organization Business for Social Responsibility on the development of a
scoring system that will help the company to understand how suppliers
compare with each other.
