Ford Motor Company Shuts F-150 Truck Production After Parts Supplier Fire

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F stock - Ford Motor Company Shuts F-150 Truck Production After Parts Supplier Fire

Ford Motor Company (NYSE:F) has halted production of its best-selling F-150 truck at two assembly plants after a fire last week at one of its supplier’s plants caused a parts shortage. F stock was off less than 0.1% in pre-market trading this morning at 5:00 a.m. EDT.

The F-150 is Ford’s best-selling vehicle and is the source of most of the automaker’s global profit.  It generated $41 billion in sales last year, about 28% of total revenue.

Car manufacturers, including Ford, book revenue as soon as a vehicle is shipped from the factory; as a result, the disruption could eventually hit company earnings. Ford said it has a strong inventory of trucks sitting on dealer lots and doesn’t expect the plant shutdowns to immediately affect sales.

“We’re confident that any impacts will be short term,” said Joe Hinrichs, president of Ford global operations, in a media call late Wednesday.

A fire on May 2 at a Eaton Rapids, Michigan plant operated by Meridian Lightweight Technologies stopped production of die-cast components used in F-150 and Super Duty trucks. With the resulting parts shortage, Ford shut down F-150 production at its Kansas City, Missouri, and Dearborn, Michigan plants. F-Series Super Duty production is down at Ford’s plant in Louisville, Kentucky, while the company expects Super Duty production to continue at its assembly plant in Avon Lake, Ohio, according to media reports.

Supplier Meridian is owned by China’s Wanfeng Auto Holding Group.

InvestorPlace contributor Ian Bezek on April 20 noted that Ford is not having a great 2018 so far. He noted F stock was down 15% since its January peak (now 14%) and is getting closer to its five-year low of $10 per share. “Ultimately, I’m not a huge fan at the moment, even with the selloff year-to-date. There are a lot of crosscurrents at play, making it hard to forecast where earnings are ultimately going,” he wrote.


Article printed from InvestorPlace Media, https://investorplace.com/2018/05/ford-motor-company-shuts-f-150-truck-production-after-parts-supplier-fire/.

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