- Ford may stop production of its best-selling and highly profitable F-150 pickup truck at two factories after a fire at a supplier.
- Fortunately for Ford, General Motors doesn’t yet have new pickups in the US markets, and Fiat Chrysler is just launching its F-150 competitor.
- Ford should recoup sales later this year unless the shutdowns are prolonged.
A fire at a Ford supplier has put production of its most important vehicle, the F-150 pickup truck, at risk.
Assembly of the best-selling truck at a pair of factories “is likely to be knocked out for several weeks,” Bloomberg reported, citing knowledgeable sources.
Ford dealers are sitting on enough supply of the pickup to hold them for several weeks. But after that, prospective buyers could encounter an unlikely sight: few F-150s on sales lots.
The F-Series pickups have long been the top-selling vehicles in the US – and for Ford, they’re a licence to print money. The company books thousands of dollars in profit for each pickup sold.
A prolonged issue with parts from Meridian Magnesium, the location of the fire, will crimp the lines at Ford factories in Michigan and Missouri. But assuming that the damage is repaired and production resumes, Ford shouldn’t endure too much of a sales hit.
General Motors’ Chevy and GMC brands are launching new full-size competitors to the F-150 and won’t have all-new trucks until later this year. Fiat Chrysler Automobiles’ Ram launched a redesigned 1500 full-size earlier this year, but that pickup has historically been in third place for sales.
So Ford has something of a grace period, and though a shutdown at the F-150 plants would cause layoffs for thousands of United Auto Workers union members, production would most likely intensify to make up for the lost time once it resumes.
Buyers of Ford pickups also tend to be a loyal bunch, so the carmaker could also see sales pushed forward a month or two. Of course, it doesn’t help that Ford is dealing with this challenge just as the spring and summer selling seasons are kicking off.
Ford shares were flat in trading Wednesday, at $US11.
Business Insider Emails & Alerts
Site highlights each day to your inbox.