Ford Motor, which announced record quarterly profits on Thursday (29 April), said last night it was idling its F-150 pickup factory near Kansas City for a week in May to rectify a problem preventing the plant from reaching production targets.
According to Bloomberg, the shut-down will start on 9 May, temporarily laying off 4,626 workers who build the aluminium body truck line. In a statement emailed to Bloomberg, Ford said initially the move was to "align our capacity with consumer demand". In a subsequent interview, Joe Hinrichs, Ford's president of the Americas, said "consumer demand for the F-150 is outstanding."
Go deeper with GlobalData
Hinrichs told Bloomberg the automaker needs to adjust the Missouri factory's body shop and paint operations, which have prevented the plant from achieving its daily production targets for the pickup. Ford decided to bring forward a 'down week' that had been scheduled for next autumn to fix those problems, he added.
"We can work on the equipment sooner and get Kansas City's daily production up to the level it needs to be," Hinrichs said. "We want to work on both the body and paint shop in Kansas City to work out a few bugs."
Bloomberg noted Ford had spent much of the previous two years converting the Kansas City factory and an assembly plant in Michigan to build the F-150 with an aluminium body, the highest-volume vehicle ever to be built with the lightweight material.
With the F-150 finally at planned volumes in the first quarter, Ford booked record North American pretax profit of $3.1bn after US sales of the F-Series line, which includes the F-150, rose 5% in the quarter to 186,121, as Ford total light-vehicle deliveries climbed 8.4%.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"We're getting the full benefit of the F-150, which is why we had a great quarter, among other things," Chief Financial Officer Bob Shanks said in an interview with Bloomberg.
The report also noted Ford had built up an inventory of 288,000 F-Series trucks as of 1 April, according to Automotive News Data Center. That represents a 105-day supply in an industry where a 60-day supply is considered ideal.
Most of that extra inventory is of the larger Super Duty version of the F-Series that Ford is redesigning and re-introducing this autumn. The automaker is "very comfortable with where we are" on F-150 supply, Hinrichs told Bloomberg.
Ford sold 780,354 F-Series pickups in the US last year, making it the nation's top-selling vehicle line for the 34th straight year. Analysts have said each of the trucks generates a pretax profit of more than US$10,000, accounting for the majority of Ford's North American earnings.
Any lost production of the F-150 is costly which is why the automaker decided to resolve the production problems at the Kansas City plant next month rather than waiting for the scheduled down week in the fall, Hinrichs told Bloomberg.
"We chose to pull this week ahead so we could fix the problem sooner rather than later," he added.
ANALYSIS: The challenge of vehicle lightweighting
