Ford Idling F-150 Production to Reduce Dealer Inventories
Car and crossover production idled, too.by Mark McNabb, on
Ford is idling production of several key models in anticipation of slowing new-car sales. The list includes the F-150, Escape, Fusion, Fiesta, and Lincoln MKC. The temporary production halt will help normalize dealership inventories, which are reported to be nearing a 95-day supply. That’s well above the optimal 60-day supply.
F-150 production at Ford’s Kansas City assembly plant will idle for one week, while Transit production continues unaltered. Production at Ford’s Dearborn Truck assembly plant, the F-150’s largest assembly point, will continue unaffected.
Reuters reported that Ford had previously warned investors of this move, citing the need to reduce dealer inventories in order to avoid extra pricing incentives to boost vehicle sales. The plant slow-down will not affect the wages of UAW workers. All assembly plants are expected to return to normal operation by the end of October.
Continue reading for more information.
Why It Matters
Ford has to look out for its bottom line – that’s business. Dealership lots stacked full of vehicles generally results in heavy discounts and incentives given to customers to free up space, cutting into Ford’s profit margins. The overcrowding issue can be avoided (or at least adjusted) by slowing vehicle production to match customer demand. Thankfully these slow-downs are only temporary and shouldn’t last very long.
Hat-tip to Truck Trend
Read our full review on the 2017 Ford F-150 here.