Ford F-150 production could be shut down - but that probably won't wreck 2018 sales
- Ford may stop production of its bestselling and highly profitable F-150 pickup truck at two factories after a supplier fire.
- 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 bestselling 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 potential buyers could encounter an unlikely site: 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 license to print money. The company books thousands of dollars in profit for each pickup sold.
A prolonged issue with parts from Meridian Magnesium Products, the location of the fire, will crimp the lines at Ford factories in Michigan and Missouri. But assuming that the damage is repaired and the supply resumes, Ford shouldn't endure too much of a sales hit.
Both General Motors' Chevy and GMC brands are in the midst of 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 its redesigned 1500 full-size earlier this year, but that pickup has historically run in third place for sales.
So Ford has something of a grace period, and although a shutdown at the F-150 plants will bring layoffs to thousands of UAW workers, once production resumes it will likely intensify to make up for the lost time.
Ford pickup buyers 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 share were flat in trading Wednesday, at $11.
Get the latest Ford stock price here.
NOW WATCH: Ford has built a plug-in hybrid cop car
- Bank deposits losing attractiveness as govt savings schemes see strong growth
- BSE, NSE issues penalty notices to HAL for not having sufficient independent directors
- India does not rush into trade agreements if it is not fair, balanced, equitable: Goyal
- Key investors move NCLT against Byju's rights issue, firm says yet to get any petition
- Samsung launches new fitness tracker Galaxy Fit3 in India