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Ford Resuming Output of F-Series After Supplier Fire

May 17, 2018
To get production up as quickly as possible, Ford airlifted an 87,000-pound die to a Meridian plant in the U.K. on a Russian-built Antonov An-124 Ruslan, one of the world’s largest cargo planes.

Ford Motor Co. will resume building its biggest moneymaker, the F-150 pickup, two weeks after a fire at a supplier’s factory halted production of trucks at three plants.

Production of F-Series pickups will restart first at Ford’s Dearborn, Mich., factory on Friday, then at plants in Kentucky and Missouri on Monday. The automaker said all three factories will be at full production by Monday and it has rebuilt its supply chain for key magnesium parts used in the trucks and in sport utility vehicles including the Lincoln Navigator and Ford Explorer, according to a statement.

“The situation is still changing hour by hour and we could still encounter some obstacles, but I’m confident the team will continue to charge ahead and find ways to deliver,” Joe Hinrichs, Ford’s president of global operations, said on a conference call with reporters. “Returning our plants to production ahead of our initial estimated timing means less of an adverse effect on the company’s near-term results.”

Ford said it expects the loss of F-Series production will lower its second-quarter financial results by as much as 14 cents per share, but it didn’t reduce its forecast for a full-year adjusted profit of $1.45 to $1.70 per share.

Hinrichs would not say how many trucks Ford expects to lose from the disruption. The company is trying to make up the lost production by asking workers in Dearborn and Kansas City to give up one week of a planned two-week vacation shutdown in July.

“We already told the workers they were having two weeks off,” Hinrichs said. “So we’re going back and asking them to work the second week of the July shutdown.”

The May 2 explosion and fire at the Chinese-owned Meridian Magnesium Products plant in Eaton Rapids, Mich., disrupted output for Ford and several other automakers, including General Motors Co., Fiat Chrysler Automobiles NV and Daimler AG’s Mercedes-Benz.

The pain has been felt most acutely at Ford, since F-Series generates most of the company’s profit. The company had shut down F-150 assembly at the plants in Dearborn and near Kansas City and also stopped building bigger Super Duty pickups at a factory in Louisville.

F-Series is the top-selling vehicle line in America, hauling in about $40 billion in annual revenue. Morgan Stanley values the franchise as worth more than the entire company.

To get production up as quickly as possible, Ford airlifted an 87,000-pound die to a Meridian plant in the U.K. on a Russian-built Antonov An-124 Ruslan, one of the world’s largest cargo planes. The massive die, used for stamping parts, made the trip from Eaton Rapids to Nottingham, England, in 30 hours, with necessary import documents secured two hours before the plane touched down. Normally, it would take 10 days for such a move, according to the company.

“We were working around the clock, across the ocean, with the teams there to really get the facilities back up and running,” Hau Thai-Tang, Ford’s head of purchasing and product development, said on the call. “We were able to do that in just under 12 days.”

By Keith Naughton

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