Published: Sun, May 13, 2018
Money | By Wilma Wheeler

Ford Halts Production For Some Trucks After Parts Maker Catches Fire

Ford Halts Production For Some Trucks After Parts Maker Catches Fire

Ford suspended all its production of its F-150 pickup, the bestselling vehicle in the nation for over 35 years, due to a parts shortage.

A fire at the Meridian Magnesium Products of America plant that makes steering columns and dashboards for the F-150 forced Ford to shut down production. Those unique metal components are provided by Meridian Magnesium Products in Eaton Rapids, Michigan, but on May 2nd, Meridian's facility caught fire.

Ford said Wednesday that it halted production of Super Duty trucks, which are F-250 through F-750 pickups, but the factories in OH and Kentucky continue churning out other models, including the Expedition and Lincoln Navigator full-size SUVs and the Econoline van.

Sources in the auto industry say privately they expect the factories will be closed for "several weeks".

"Customers won't have a problem finding the model they want", he said. Since there trucks don't have the same production volume as the more popular consumer models including the F-150, F-250 and F-350, the OH plant will be able to go the longest on the inventory of parts on hand.

Ford has already stopped truck production at the Kansas City plant, but it could shut down the MI plant in the next few days.

"I would say the biggest danger is if this lingers on longer", Krebs said.

The fire, whose cause is under investigation by local authorities, triggered smaller production disruptions to other vehicle manufacturers, including General Motors Co., Fiat Chrysler Automobiles, Daimler AG and BMW AG, the companies confirmed to Reuters on Wednesday. "When you're more dependent on only a few models to drive sales, the company's bottom line is much more sensitive to these kinds of unplanned setbacks". Ford was able to recover the 19 tool sets it needs to restart production of components from fire scene, but it will take time to restart the supply chain.

The company had said that in April, dealers on average had a 65 day supply of trucks, down 16 days, or 20 percent, from April 2017.

The company said it still has an ample selection of trucks at USA dealerships.

While the production shortage is expected to have an adverse impact on the company's near term results, the company's guidance of delivering an adjusted EPS in the range of $1.45 to $1.70 for the full year is unchanged. That includes some larger trucks than the F-150, although the F-150 makes up the overwhelming majority of those sales.

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