Ford Truck Factory Closes or Affects Q2 Profit due to Supplier Misfire

Time: 2018-5-10  Hits: 69

Geely Automobile News According to foreign media reports, on May 9, local time, Ford Motor Company stated that a fire broke out at a factory of the company’s major component supplier Meridian Magnesium Products, resulting in the suspension of production of Ford’s three American truck factories, or affecting Ford’s second For quarterly earnings, the company also confirmed its full-year earnings estimates.
Joe Hinrichs, president of Ford Motors Worldwide Operations, said in a media call on the evening of May 9th, “We are confident that any impact will be short-term.”
Ford has closed truck plants in Kansas City, Missouri and Louisville, Kentucky, and will close the Dearborn, Mich. facility on Wednesday evening. Ford said the Louisville plant is still producing Expedition and Navigator. Ford Motor Co. shares closed down 1.9% to $11.06.
Hinrichs and Purchasing Director Hau Thai Tang said that Ford had negotiated with Meridian to transfer the affected parts production to other suppliers until the fire-affected factory in Michigan was repaired and resumed production. The Meridian plant in Strathroy, Ontario, temporarily provides a variety of lightweight structural components for Ford trucks and multi-purpose vehicles. Models include: F-150 and Super Duty pickups, Expedition, Navigator, Explorer, Flex, and MKT. Multipurpose vehicle. Hinrichs said that it will take at least a few more days before the factory can produce the affected parts. At present, foreign media is still unable to obtain the views of Meridian.
The fire occurred on May 2 at the Meridian plant in Michigan. Local authorities are still investigating the cause of the fire. The fire also caused minor production disruptions to other automakers, including General Motors and Fiat Chrysler. , Daimler and BMW. But Ford is the most affected. Its F-150 full-size pickup is Ford’s best-selling model in the United States. It generated sales of 41 billion US dollars last year, accounting for 28% of its total sales, and the highest proportion of profit. Meridian holds shares for Wanfeng Auto Holding Group Co., Ltd., a Chinese supplier. According to data from Meridian and Wanfeng, the company also provided parts to Tesla and other companies.
Buck Research Institute analyst Joseph Amaturo wrote in a report on Wednesday that the two-week shutdown of the F-series could reduce Ford’s second quarter profit by $3.1 million. Hinrichs said that the Ford U.S. dealer’s F-series pickup trucks have 84 days of turnover, so “we don’t expect any sales loss”. And said that Ford should be able to fill output through overtime in the second half of this year.