Ford Motor Company (NYSE:F) has announced that it has temporarily stopped the production the best-selling F-150 at two of its assemble facilities. The move comes after a fire outbreak at the company’s parts supplier plant. The fire has caused the automaker to experience a shortage in important components.
Fire broke out at a Chinese-owned auto parts located in Michigan and has cut off the supply of important parts and led to a big disruption of vehicle assembly. Ford has indicated that the halt of production will negative affect its revenue in the second quarter. The F-150 is the best-selling and generates majority of the company’s profits. The company recorded $41 billion in sales from the F-150 which accounted for around 28% of total revenue.
Many car producers record their revenue as soon as they have shipped the vehicle from their assembly plant. As a result the company revenues will largely be affected. In a statement, Ford president in charge of global operations Joe Hinrichs said that the company is confident that the effect will be short term.
On May 2,fire broke out at the a Eaton Rapids, Michigan plant, which is operated by Meridian Lightweight Technologies. Due to the fire, Eaton Rapids has since stopped to produce the die-cast components which are used in Super Duty trucks and F-150.
Following a shortage in parts, Ford closed the production of F-150 at the Michigan, Dearborn, Missouri and Kansas City plants. The company stopped production of F-Series Super Duty at its Louisville, Kentucky plant. According to a media report, Super Duty production will continue at the company’s plant at Avon Lake, Ohio.Supplier Meridian is owned by Wanfeng Auto Holding Group from China.
Earlier in April, Ian Bezek, a contributor at InvestorPlace said that 2018 had started on the wrong note for Ford. He said that the company’s stock had dropped by 15% since the January peak. The stock is now getting close to its five-year low of $10 a share. Bezek said that there are a lot of crosscurrents at play, making it hard to project the company’s expected earnings.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
Your information is 100% secure with us and will never be shared Disclaimer & Privacy Policy