Cars and Drivers
Ford Pickup Truck Production Could Resume Next Friday
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A major fire at a parts supplier to Ford Motor Co. (NYSE: F) forced the company to shut down its F-150 and Super Duty assembly lines last week. Late Friday, Reuters reported that an unnamed source “familiar with the automaker’s plans” said that the F-150 plants in Kansas City and Dearborn, Michigan, could restart production as soon as Friday, May 18.
The Super Duty assembly line in Louisville, Kentucky was not named, but that plant continues building Ford Expedition and Lincoln Navigator sport utility vehicles, even while pickup production is suspended.
According to a report at CNN, Ford has about 84 days of supply available, which means that after about a month, when the inventory falls to a supply of about 50 days, dealers and customers may be unable to get the trucks they want with the right engine or cab size or trim level.
When Ford announced that it had shut down the three pickup assembly lines, it also noted that its annual guidance of adjusted earnings per share between $1.45 and $1.75 would still hold. However, “the production shortage is expected to have an adverse impact on the company’s near term results.”
On Friday, an executive from Moody’s agreed:
Although near-term profits will weaken due to the shutdown, current inventory levels of the two vehicles, combined with accelerated production after facilities come back online, should make up for any initial shortfall.
The fire at the Meridian Magnesium Products facility in Eaton Rapids, Michigan, also forced Mercedes-Benz on Thursday to halt production of its SUVs at its plant in Alabama. The plant is expected to reopen next week on a modified production schedule, but when it will be able fully to restart production remains unclear.
In the first four months of the year, Ford sold 287,295 F-Series pickups, up 4.1% year over year. Ford’s entire sales for the period were 804,232, down 3.3%.
Ford stock closed down about 0.2% on Friday, at $11.19 in a 52-week range of $10.14 to $13.48. The stock’s 12-month price target is $12.37.
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