Published: Fri, May 11, 2018
Economy | By

Ford suspends production of F-150 trucks

Ford suspends production of F-150 trucks

The Super Duty is one of the automaker's most profitable vehicles.

Ford sold 73,104 F-150s in April and 287,295 F-Series trucks in the United States in the first four months of the year, up 4 percent from last year.

"We're confident that any impacts will be short-term", Joe Hinrichs, executive vice president and president of Global Operations, said in a statement. "We do not anticipate losing any sales as a result of this and we'll be able, over time, to make up the production".

General Motors, Fiat Chrysler, BMW and Mercedes-Benz also said output has been disrupted. It had already suspended truck production at a plant just outside Kansas City, Missouri. Morgan Stanley recently estimated that the F-150 alone may be worth more than the whole company.

The company only has two plants that build the trucks. It's a key profit generator for Ford. It generated $41 billion in sales a year ago, about 28% of total revenue. Ford's stock fell almost 2 percent by market closing. And it continues to sell more and more of its higher-priced trucks. "However, the longer the downtime, the tougher this gets".

Ford claims that it only accounts for less than a third of the output from the Meridian plant. Hence about 3,400 workers went home because of the parts shortage caused by a May 2 fire at Meridian Magnesium Products in Eaton Rapids. "It's really a day-to-day, hour-to-hour situation".

Ford could make up some of the lost production later in the year by running overtime. It is unclear when production will resume. "Everybody needs it. Everybody wants it, and the supply chain isn't mature yet for this kind of volume". "This isn't like picking up screws at the hardware store". That disturbed the North American auto industry. Those unique metal components are provided by Meridian Magnesium Products in Eaton Rapids, Michigan, but on May 2nd, Meridian's facility caught fire.

The impact everyone else faces will pale in comparison to Ford, an automotive research firm located in Ann Arbor, Michigan said. However, that may change depending on the length of the production halt, which has not yet been determined. Ford employs approximately 202,000 people worldwide. It makes no sense for auto makers to manufacture it by themselves.

Ford F-Series Super Duty production is down at Kentucky Truck Plant in Louisville. The company said Wednesday afternoon it would also close a temporarily halt production at a plant in Dearborn, Mich. And Ford hasn't stopped building the Expedition and Lincoln Navigator full-size SUVs in Kentucky. Ford doesn't expect any disruption for customers or dealerships because it has an 84-day supply of the truck in dealers' inventories.

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