Ford Readies Plant Downtime to Prepare for New F-150
It’s not uncommon for auto manufacturers to idle their facilities throughout the year, giving their workers some needed time off and checking up on the equipment and tools to ensure everything is operating as it should. When Ford (NYSE:F) idles its Dearborn Truck Plant in Michigan and its plant near Kansas City, Missouri, though, it will be using the cumulative 13 weeks to retool the facilities to prepare for the production of its 2015 F-150 pickup.
Dearborn will be idled for 11 weeks, while the Missouri plant will be down for two weeks. With 16 model launches coming this year in North America alone, it’s crucial that Ford’s rollout of the new truck — and its aluminum structure — goes as smoothly as possible, also considering that the F-150 is a profit margin machine for Ford. The model accounted for 31 percent of Ford’s U.S. light-vehicle sales in 2013; Morgan Stanley says that the truck is responsible for 90 percent of Ford’s global profits.
“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,” Efraim Levy, an analyst with S&P Capital IQ, said in a note to investors, per Automotive News.
Levy’s concerns were echoed by Ford, which has warned that profits may decline in 2014 as the company gears up its crown jewel for one of the most extensive overhauls in its history. The expected declines are “largely attributable to F-Series,” Ford CFO Bob Shanks said during Ford’s conference call on Tuesday, according to Automotive News.