US automaker Ford said on Wednesday that it was halting production of its popular F-150 pick-up truck after a fire last week at one of its parts suppliers.
Ford is suspending production of the F-150, its most popular and profitable vehicle, at plants in Kansas City, Missouri, and Dearborn, Michigan, while halting production of another model, the Super Duty, at another plant in Louisville, Kentucky.
Ford executives said on a media call that the company has 84 days of supply of the best-selling F-series trucks, adding that the disruption is likely to last for at least several days. Sales chief Erich Merkle said, “it’s hour to hour . . . we can’t say beyond that”.
The move comes after a May 2 explosion and fire at Meridian Magnesium Products of America in Michigan, which has led to a shortage of die-cast components, Ford said.
Joe Hinrichs, executive vice-president and president of global operations, said:
“This is a fluid situation, but we are working closely with our supplier partners to do everything we can to limit the impact on our production. It’s a full team effort and we’re confident that any impacts will be short term. The good news is we have strong inventories of our best-selling F-series pick-ups and other vehicles, and customers won’t have a problem finding the model they want.”
While the production halt will probably have a negative impact on its short-term earnings, Ford said that it was standing by its full-year guidance for adjusted earnings per share between $1.45 and $1.70.
Charlie Chesbrough, auto industry economist at Cox Automotive said the impact will depend on the length of the shutdown.
“A short-term disruption can often clear out inventory and allow for strict pricing. A long-term shut down can be much worse. In Ford’s case, the timing is difficult with the new Ram truck in the market and new GM Silverado coming this summer. A major disruption could not come at a worse time for Ford — 70,000 sales each month are at stake.”
For shares were down 0.18 per cent in after-hours trading.
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