A 2018 Ford F-150 “King Ranch” pickup truck is displayed during the North American International Auto Show in Detroit, Michigan, U.S., January 10, 2017. (REUTERS/Mark Blinch)
Production of the F-150, the most important vehicle in Ford’s showrooms, has ground to a halt.
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Ford on Wednesday was forced to suspend all production of the F-150 after a fire at a key supplier’s manufacturing facility. It remained unclear how long the plants in Kansas City, Missouri, and Dearborn, Michigan, will need to wait before building F-150s again. Ford is working with other suppliers to minimize the disruption.
Despite the factory downtime, dealers have enough trucks on their lots to satisfy demand until production resumes, Ford said. The company also said near-term financial results could suffer, but it doesn’t expect the shutdown to hurt its full-year profit.
The assurance likely came as a relief to investors, given that F-Series trucks account for most of Ford’s profits.
Morgan Stanley analyst Adam Jonas has estimated that the F-Series, which includes F-150 and Super Duty trucks and remains the best-selling lineup in America, is responsible for 90% of the automaker’s global profits. Jonas recently said the F-150 alone may be worth more than the whole company amid a slump in Ford shares.
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With prices on the rise across the industry, Ford trucks have sold for around $47,000 on average in the first four months of 2018. Most analysts say Ford makes approximately $10,000 on every truck it sells, depending on the exact model and trim level.
The F-Series also accounts for a third of all cars and trucks that Ford builds in North America. The company produced more than a million pickup trucks in 2017, while sales in the U.S. totaled around 896,000 to mark a 12-year high.
The production hiccup is the latest headache for CEO Jim Hackett, who has faced pressure from Wall Street analysts looking for more details about Ford’s transformation plans.
Ford recently announced that it will stop selling all but two passenger car models in a large bet on SUVs. The company is relying on SUVs and trucks like the F-150 to drive its bottom line, ditching slow-selling cars that generate little in the way of profits. Reports indicated that Ford even lost money on some sedans.
Hackett has also said Ford will accelerate investments in self-driving vehicles, electric cars and other technology.
