Ford names Husco Automotive a preferred supplier
Jul 06, 2012 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) --
Husco Automotive said Thursday its engine parts business could double this year as the company becomes a preferred supplier to Ford Motor Co.
The Whitewater-based division of Husco International said it had $50 million in sales last year and expects more than $100 million this year as it makes engine controls that improve a vehicle's gas mileage and reduce pollutants.
More than 25% of the division's business is with Ford
Husco said it's now part of Ford's Aligned Business Framework, a supplier network with only 78 participants worldwide.
Under the program, suppliers get involved with Ford's vehicle development plans earlier and in more depth. The suppliers still have to be competitive, but Ford is more likely to make long-term commitments to them if they're part of the design process.
It changes the landscape for how suppliers work with a company like Ford, said Husco Automotive President Todd Zakreski.
The company produces engine-valve controls for the automotive industry at a time when fuel efficiency in the U.S. and around the world has become a top priority.
For example: Automotive engines are often built for optimal efficiency at 55 or 60 mph. Husco makes products that allow the same engines to achieve optimal efficiency at speeds from 25 to 75 mph.
Improving the odds
Those products are difficult to engineer, so being more closely aligned with a large customer such as Ford improves the odds of being successful and can reduce costs.
There's more open dialogue with the automaker, including candid discussions about problems and challenges a supplier faces.
Preferred suppliers don't have to worry as much about competitors nipping at their heels and not knowing who is going to get Ford's business.
At times, Zakreski said, "You didn't know where you stood after investing a lot of time and money to develop something. By getting involved earlier, and knowing you will be the supplier, you're not having to address key activities in fire-drill mode."
Husco has been a direct supplier to Ford for about five years, and before that it worked indirectly with the automaker.
Ford created its Aligned Business Framework in 2005 to recognize suppliers that continuously exceeded technology, cost and quality standards.
Working with Ford, there's huge potential for growth, Zakreski said.
Automakers can be tough customers. Often a supplier's profit margin is thin, and there's an obligation to reduce costs every year.
Treated as partners
Preferred suppliers are treated more like business partners and less like a commodity based only on price.
"Sure, there are still cost pressures. But the fact that you can sit across the table from someone and participate in their design process is probably very advantageous from a planning perspective and capital commitments for years out," said Doug Fisher, director of the Center for Supply Chain Management in Marquette University's College of Business.
"It's more like a relationship," Fisher added.
Like other U.S. manufacturers, Husco International was pummeled in the recession. It had layoffs and cut wages for many workers.
Hundreds of jobs added
Worldwide, the company has added hundreds of jobs since the trough of the recession in 2009. More than half of the jobs are in North America, and more than 200 have been added at Husco's plants in Waukesha and Whitewater.
Besides its automotive division, Husco develops and manufactures hydraulic controls for the off-highway equipment markets. Its products are critical components that run things such as skid steers, forklifts, cranes, backhoes, excavators and mining trucks.
Husco International has more than 300 engineers worldwide. It also has about 40 engineering interns on staff, including students from Marquette University, Milwaukee School of Engineering and the University of Wisconsin system.
Husco Automotive has 185 employees.
"We are in a hiring mode, especially for experienced technical talent," Zakreski said.
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