THE SOFTWARE GLITCH that halted production of the Ford Fiesta and related models for several days in June will probably cost car lock supplier Kiekert AG some business.
Two analysts who attended a Kiekert briefing on 21 August in Germany said they expect Kiekert to lose about half its lock contract for the Fiesta-based models. The contract is worth DM40 million ($22 million) to DM50 million a year.
However, Ford and Kiekert say they continue to negotiate over future projects. The analysts said Kiekert would continue to be the sole door lock supplier to the Mondeo in Europe.
A software failure shut one of Kiekert's lock production lines for 10 days. A Kiekert executive said its cost of the shutdown will almost certainly be under DM1 million.
Ford lost DM200 million in production that it hasn't yet made up. The carmaker lost 4,500 vehicles over six shifts of production at Cologne, Germany, which makes the Puma and Fiesta. It lost 5,500 vehicles over eight shifts of production at Dagenham, UK, which makes the Fiesta and two related vehicles, the Mazda 121 and Ford Courier van. And it lost a few units of Ka production at Valencia, Spain.
Kiekert told the financial analysts that it tried to improve the software that performs quality control checks on locks for Ford. Kiekert's own employees did the new programming.
But the new software failed to work as expected when it was installed, and the company's back-up disks could not restore the main program. The production line had to be shut down while Kiekert reinstalled software. Other lines, which had been optimized to make other locks, were unaffected.
Detlef Kluessendorf, a Kiekert spokesman, said the stoppage had no effect on the relationship with Ford. Ford spokesman Paul Schinhofen said the shutdown had affected relations between the companies 'a little bit.'
One analyst at the meeting expected Kiekert to get new contracts from Ford worth about the same as the Fiesta business it is likely to lose. The Kiekert executive said issues from the software failure will be fully resolved in September.
Kiekert has already made good its production shortfall at its Heligenhaus plant. The works council at Kiekert agreed that because the production loss was an accident the extra shifts were paid at the normal rate rather than on overtime.
Ford has been talking to its workers in Cologne about how to make up the loss.