As Ford Motor Co. makes more global vehicles, it is agitating some suppliers by asking for their permission to let other suppliers produce their parts.

Here's the problem from Ford's viewpoint: Say a supplier can't provide a part for a Ford assembly plant in China or Thailand. Ford wants the ability to hire a local contract manufacturer to produce it.

But to the original supplier, this means turning over technology secrets to an outsider.

Ford's request for suppliers to sign the so-called design transfer agreement comes as the company wins higher marks for supplier relations. But the tension also shows that Ford isn't letting up pressure on suppliers as it strives to cut costs and increase production of global vehicles in far-flung markets.

One supplier source who spoke on the condition of anonymity called Ford's request to share technology a "tough proposition." Another worried that contract manufacturers could take the designs and sell the product to customers other than Ford.

The second supplier also suggested that language in the agreement could allow Ford to pressure suppliers for price cuts. A copy of the agreement obtained by Automotive News says in part: "In order to achieve the best local cost structure and maintain commonality on a global basis, this design transfer agreement will enable the sharing of technology."

'Paranoia'?

Tony Brown, Ford's head of purchasing, dismissed the suppliers' fears, calling them "paranoia." While the wording of the agreement is negotiable and can be tailored to a specific situation, Brown made clear that suppliers will have to accept possible technology sharing as one of the terms of doing business with Ford.

"Because they think it's unfair doesn't make them right," Brown told Automotive News. "It makes that we disagree. And then they get a choice: They can either do business with us or not do business with us."

If technology is shared, Ford will make sure the original supplier is compensated, Brown said.

It's unclear how many suppliers have been asked to sign the design transfer agreement -- Ford officials wouldn't say. The agreement will be sought only on select programs and parts. The automaker wants to use the same parts -- and, when possible, the same supplier -- wherever it manufactures a vehicle.

Miscalculation?

John Henke, CEO of Planning Perspectives, gives Ford credit for starting to improve its once-abysmal supplier relations. That improvement has been reflected in prominent supplier surveys including Henke's.

But he says it appears that Ford executives miscalculated how to best obtain a technology-sharing accord. Rather than distribute a broad agreement, they should approach suppliers right from the beginning to obtain an agreement tailored to the specific company, product and country over which Ford has concern.

"They're going about doing it the way they've always done so," Henke says. "And they're not thinking about how do we do this and ensure we keep the trust we've built. That suggests to me that things are improving, but the mind-set isn't there yet."

Ford says the broad agreement is a starting point. The company intends to share designs only as a last resort, spokesman Todd Nissen said, when a supplier is unable to supply a country where production is planned.