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Italy-based maker signs to supply '05 Mustang GT, others

By Eric Mayne / The Detroit News

Pirelli SpA is expected to announce today a major deal to provide tires for several new Ford Motor Co. models that will further solidify its relationship with the Dearborn automaker.

From its new plant in Rome, Ga., the Italian manufacturing giant will supply Ford with tires for the 2005 Ford Mustang GT, as well as the Ford Five Hundred and Mercury Montego sedans and the Freestyle “crossover” vehicle.

The deal is pushing to raise its profile in North America, which accounts for less than 10 percent of the company’s annual sales of $3.2 billion. Ford will benefit from the Pirelli name, which has long been associated with high performance exotic brands such as Ferarri and Lamborghini.

Pirelli is already a supplier to Ford vehicles including the Focus ST and Excursion full-size sport utility vehicle. The expansion of their business relationship comes less than three years after Ford severed ties with longtime supplier Bridgestone/Firestone Inc.

Ford and Firestone parted ways over a $2.1 billion Firestone tire recall linked to the Ford Explorer and nearly 300 rollover deaths. The Pirelli deal is not connected to the Firestone dispute. In recent months, Ford has negotiated similar supply contracts with other tire manufacturers, such as South Korea’s Hankook Tire Co. Ltd.

Financial details of the Ford-Pirelli deal will not be released, but it is a multiyear pact. And it could be a major boost to Pirelli because the contract will cover several high-volume Ford products.

Sales of the new Mustang will hover near the 150,000 unit mark for 2003. And this year’s launch of the 2005 model should get a boost from the car’s first major structural redesign in more than three decades.

Ford also will benefit from the state-of-the-art manufacturing system installed in Pirelli’s plant north of Atlanta.

The tire maker has the flexibility to build numerous tire models on the same equipment and shift between models within 90 minutes. Changing models on conventional equipment can stop production for as long as two days.
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