CLEPA drops opposition to Ford terms

Bradford Wernle | Automotive News Europe

Brussels -- Partsmakers will drop their opposition to Ford's supplier agreements. They surrendered after the European Commission declined to investigate allegations the automaker was acting unfairly.

Last year, European supplier association CLEPA asked the Commission to investigate Ford. CLEPA said its members complained that Ford's global terms and conditions, submitted to suppliers in 2004, were invasive and perhaps even illegal in the European Union and some individual countries.

Not enough evidence

Suppliers complained that Ford could cancel contracts without notice, tap into their bank accounts and force suppliers to surrender their intellectual property to Ford.

Paolo Cesarini, head of the automotive unit of the EU's competition commission, replied in a February letter to CLEPA that the Commission "doesn't have enough elements at its disposal to point to the existence of an infringement on any relevant market."

Cesarini said the Commission would investigate further if CLEPA produced more evidence.

CLEPA Executive Director Lars Holmqvist said the Commission wanted specific evidence about transactions between suppliers and Ford. CLEPA members declined, fearing they might damage their relations with Ford, he said.

"To act tough, the Commission would need very specific details of individual relationships between suppliers and Ford," Holmqvist said. "Obviously that is something no supplier would like to give us."

Holmqvist said the Commission wanted to base any case against Ford on information about an individual supplier.

Complaint 'baseless'

"Nobody wanted to do that," he said. "Ford flexed its muscles and told them what would happen if they went individually to the Commission."

Ford feels vindicated, said Paul Wood, a spokesman for the automaker based in Detroit.

Wood said the European Commission had rejected CLEPA's allegations as "baseless and unfounded."

He said: "The motivations for CLEPA's actions were unclear. Of the 16 suppliers Ford directly does business with and that sit on CLEPA's board, not a single one is objecting to our terms and conditions."

From Automotive News (A Crain publication)