All-new Ford 2015 F-150 pickup trucks move down the final inspection line at the Ford Rouge Center in Dearborn, Mich., on Nov. 11, 2014. (REUTERS/Rebecca Cook/File Photo)
Ford says lost truck production will hit earnings
— Ford Motor Co’s quarterly earnings will be affected by shutdowns at three U.S. truck plants caused by a fire at a key parts supplier, the U.S. automaker said on Wednesday, while affirming its full-year earnings estimate.
“We’re confident that any impacts will be short term,” said Joe Hinrichs, president of Ford global operations, in a media call late Wednesday.
Hinrichs and purchasing director Hau Thai Tang said Ford was working with the supplier, Chinese-owned Meridian Magnesium Products, to shift production of the affected parts to other suppliers until the fire-damaged plant in Eaton Rapids, Michigan, can be repaired and production resumed.
A Meridian plant in Strathroy, Ontario, is among those sites that will temporarily make lightweight parts for the Ford F-150 and Super Duty pickups, as well as the Expedition, Navigator, Explorer, Flex and MKT utility vehicles.
Meridian could not be reached for comment.
Ford has closed truck plants in Kansas City, Missouri, and Louisville, Kentucky, and will shutter a third, in Dearborn, Michigan, on Wednesday evening. Expedition and Navigator remain in production in Louisville, Ford said.
The May 2 fire, whose cause is being investigated 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 said on Wednesday.
But the most significant impact was felt by Ford, whose F-150 full-size pickup is the best-selling vehicle in the United States. The vehicle generated $41 billion in revenue last year, about 28 percent of total sales and the lion’s share of its profits.
Meridian supplies several lightweight structural parts for the Ford trucks and utility vehicles, including an engine compartment reinforcement piece for the full-size F-series pickups.
Hinrichs said it would be at least several days and perhaps longer before alternate sites will produce the affected parts.
A two-week production halt for the F-series could slice as much as $310 million from Ford’s second-quarter profits, Buck Research analyst Joseph Amaturo wrote in a note Wednesday.
Hinrichs said Ford has an 84-day supply of F-series pickups at U.S. dealers so “we don’t anticipate losing any sales.” He said Ford should be able to make up the lost production later in the year by running overtime.