Ford Idles F-150 Plant in Preparation for New Aluminum Models

By | January 29, 2014
Ford has had to idle the production plants that produce the F-150 for up to 13 weeks as the plants get retooled in preparation for the new aluminum models. The Dearborn, Mich. plant will be down for 11 weeks, while the Kansas City, Mo. plant will only be idled for two weeks. For the automaker's number one seller, this downtime can prove to be detrimental to profits. This new F-150 model will affect the company's profits as the all-aluminum model is more expensive and harder to build. "We see '14 profit pressure from extended truck production downtime for the transition to the new aluminum F-150 pickup truck and increased sales of smaller vehicles that have narrower margins," said Efraim Levy, analyst with S&P Capital IQ, in a recent statement. The automaker does expect to be less profitable in the North American market this year thanks to the new F-Series, but operating margins are expected to range between 8 and 9 percent. In order for Ford to come out in the positive with the launch of the new truck, the automaker will have to build up a large enough inventory to meet customer demands, but if too many trucks are built, Ford will have to apply large discounts to sell them.
Source: Automotive News (Subscription Required)