Ford will cut production of F-series, other models as demand slows
By Bernie Woodall
DETROIT (Reuters) - In a fresh sign of pressure on U.S. automakers, Ford Motor Co on Monday said it will shut down production of its best-selling F-150 pickup truck for a week at a Kansas City assembly plant, and temporarily idle three other plants over the next several weeks.
About 13,000 Ford hourly workers will be laid off during the temporary shutdowns. There are nearly 14,000 workers at the four plants, the company said. Some of them are salaried managers. Of the layoffs, about 4,000 will be in Mexico and about 9,000 in the United States. The cuts will hit Ford's three highest-volume models in the United States.
The F-150 is the best-selling vehicle model in North America, where Ford in the second quarter derived 90 percent of its profit, and the F-150 is a key profit-maker for Ford. However, sales of the overall F-series pickup model line fell nearly 3 per cent in September. Ford dealers had a heavy 95 days' supply of the pickups on their lots at the end of September, according to data compiled by Automotive News.
F-150 production at the Dearborn Truck Plant in Michigan will continue without interruption, Ford said.
Ford is also suspending production of two sport utility vehicles, the Ford Escape and the Lincoln MKC, at its Louisville Assembly Plant for two of the next three weeks. The compact Escape, the company's second best-selling U.S. model, is under increasing pressure from Japanese rivals. Escape U.S. sales were down 12 percent in September.
Ford said it also is shutting two plants in Mexico. One is a plant in Hermosillo that makes the Ford Fusion and the Lincoln MKZ sedans, and the other is in Cuautitlan that makes the Ford Fiesta small car. Fusion is the No. 3 seller in Ford's U.S. lineup, but suffered a 17.5 percent drop in sales last month.
"During our second quarter financial call, we said we expected the overall retail industry to decline in the second half of the year from the same period last year. We also said to expect to see some production adjustments in the second half - this is one of them. We continue matching production to meet demand," said Kelli Felker, Ford spokeswoman.
Ford warned investors last month that its profits would decline next year, and lowered its 2016 pretax profit forecast to $10.2 billion from at least $10.8 billion because of a charge in the third quarter for an expanded vehicle recall.
The U.S. workers with more than one year of experience will get about 80 percent of their normal paycheck during the shutdowns, combining state unemployment benefits and Ford supplemental pay, Ford said. The company did not immediately have details on compensation for the workers in Mexico.
(Reporting by Bernie Woodall; Editing by Cynthia Osterman and Joseph White)
