Ford halts F-150 production over parts shortage
Ford Motor Co. is shutting down the Dearborn Truck Plant at the end of the second shift Wednesday, halting F-150 production in all its plants after a major fire at a parts supplier.
The automaker shuttered its Kansas City plant that produces the F-150 pickup earlier this week due to parts shortages. Fiat Chrysler Automobiles NV, General Motors Co., BMW and Mercedes-Benz also have halted or adjusted production on some vehicles in the U.S. and Canada as a result of the May 2 explosion and fire at Meridian Magnesium Products in Eaton Rapids.
“I think it’s safe to say we’re going to see an impact for several days, but we can’t say beyond that,” Joe Hinrichs, Ford’s executive vice president and president of global operations, said in a Wednesday evening conference call. “We do not see the situation impacting sales at all.”
Hau Thai-Tang, Ford’s executive vice president of product development and purchasing, said one-third of the Eaton Rapids factory’s outputs go into Ford products. The F-150, Super Duty, Expedition, Navigator, Explorer, Flex and MKT all have parts from that factory.
So far, only Ford’s F-150 and Super Duty are affected. The company said Wednesday it has 84 days’ supply of the trucks, which should keep sales up amid lost production.
Thai-Tang and Hinrichs said Ford has retrieved all of its tools and dies from the facility; none were damaged in the fire. The company is working with Meridian to get the plant back up, and also is working to restart casting operations at other facilities.
Ford expects the downtime to affect second-quarter profits, but kept its full-year guidance.
In addition to Ford F-Series pickups, production of the Chrysler Pacifica minivan and GMC Savana and Chevrolet Express full-size vans has been impacted due to supply-chain disruptions caused by the fire. Meridian Magnesium Products, touted on the company website as the world’s largest supplier of magnesium die-cast components, is a unit of China’s Wanfeng Auto Holdings Group Co. Ltd. A Meridian representative did not respond to a Detroit News request for comment.
GM spokeswoman Kimberly Carpenter told The News on Wednesday the company has temporarily halted production of its full-size vans at its Wentzville, Missouri, plant. The Wentzville plant is the only facility that builds the GMC Savana and Chevrolet Express vans.
“GM Wentzville will continue to produce the popular midsize Chevrolet Colorado and GMC Canyon,” Carpenter said. “GM Purchasing and Supply Chain is working to resume full-size van production as quickly as possible.”
GM spokesman Jim Cain said the Detroit automaker has a “sufficient stock (of full-size vans) on the ground and in-transit” and does not expect an immediate impact on retail customers.
Ford’s Kansas City factory employs 3,600 workers. About 4,000 workers are employed at the Dearborn plant.
The shutdowns could cost Ford as much as 15,000 trucks per week, according to James Albertine, an analyst with Consumer Edge Research.
F-Series pickups generate most of Ford’s profits, and Morgan Stanley recently estimated the value of the franchise as greater than that of the entire company. The truck line, including the F-250 and other larger models, hauls in about $40 billion in annual revenue, exceeding the annual sales of companies such as Facebook Inc. and Nike Inc.
Fiat Chrysler spokeswoman Jodi Tinson said production of the Chrysler Pacifica at the Windsor Assembly Plant has been “impacted” as a result of the fire. “The company is adjusting production schedules as needed to minimize plant downtime, but will make up any lost production,” she said. “FCA continues to work with the supplier’s team on recovery efforts.”
BMW said Wednesday that production of its X5 and X6 will experience “some interruptions” at its plant in Spartanburg, South Carolina, as a result of the fire.
Mercedes-Benz said it had canceled production shifts in certain areas and adjusted production hours at its Tuscaloosa County, Alabama, plant because of a shortage of parts for some of the vehicles built there.
Michelle Krebs, an analyst with Cox Automotive, said without information on how long Meridian will be down, it’s hard to say what the impact of a production halt could be.
But the carmakers can make up for downtime. “They can add production, add shifts,” Krebs said. “The supplier can, too.”
It’s unclear how many hourly workers will be affected by the stoppage. The UAW’s 2015 collective bargaining agreements for the Detroit Three provide supplemental pay for employees in the event of plant shutdowns.
Wire reports contributed