updated 5/19/2006 5:59:21 PM ET 2006-05-19T21:59:21

Ford Motor Co. has made preparations for a strike by auto supplier Delphi Corp., but Ford Chairman and Chief Executive Bill Ford said he’s been encouraged by reports of progress in negotiations that could avoid a strike.

Ford also said he supports President Bush’s effort to let the administration — not Congress — set new fuel economy standards for cars, saying that would ensure the rules are dictated by science instead of politics. But he said he was hurt earlier this year when Bush implied that the Big Three automakers aren’t making relevant products.

“If we haven’t done a good job of demonstrating that relevance, then I guess that’s partly our fault and I hope today starts to re-establish that,” Ford said in an interview with Washington-based reporters Thursday after meeting with members of Congress.

The United Auto Workers and other Delphi unions have threatened to strike if the company throws out its labor contracts and imposes lower wages as part of its restructuring in bankruptcy court. Delphi wants to lower U.S. workers’ wages but has been unable to reach a settlement with its unions and General Motors Corp., its former parent and largest customer. The company is now asking a bankruptcy judge for permission to void its contracts.

Ford buys about $1 billion in parts from Delphi each year. Eighty-five percent of those parts come from plants outside the United States which wouldn’t be affected by the strike, according to Ford spokesman Paul Wood. That means Ford would face far less disruption in a strike than GM, which relies on Delphi for $14 billion in parts each year.

“Our direct exposure to Delphi in the U.S. is very low,” Ford said. “But clearly, depending on the scenario one paints, our entire industry will be affected. So what we’ve tried to do is to game plan all the possible outcomes and what our response would be in all of those outcomes.”

Wood wouldn’t say whether Ford is stockpiling parts in case of a strike. GM Chairman and Chief Executive Rick Wagoner said in an interview earlier this month that GM has stockpiled less than a months’ worth of parts but would prefer to reach a settlement.

Ford said he’s following the talks closely.

“I do read what Rick says and what Delphi’s been saying and what the UAW has been saying and even though it seems to be a lot of rhetoric, and necessarily so, I am encouraged by the fact that they believe they can work this out,” Ford said.

Ford said he was pleased with the Big Three’s meetings with Congressional leaders on Thursday. Ford, Wagoner and Chrysler President and Chief Executive Tom LaSorda pushed for help in making ethanol fuel pumps more widely available and talked about issues that hurt their competitiveness, such as health care, currency manipulation and trade rules.

“I think its quite a feat that you got the three autos together,” he said. “It’s interesting because obviously on a daily basis we try and slit each others’ throats in the marketplace but on the issues we outlined today we’re in complete agreement.”

He also said he’s glad Bush has been talking about reducing the company’s dependence on foreign oil through homegrown measures such as ethanol. Ford and the other executives are scheduled to meet with Bush in June.

“I think the president sees that the world has changed and he wants to do the right thing for the country and wants to show leadership on this issue,” Ford said. “We’re very anxious to let him know that we are not only willing to participate but lead on some of these critical issues.”

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