Ford staged a massive effort to salvage critical equipment from parts supplier Meridian Magnesium Products
On May 2nd, a fire ripped through the manufacturing facility of one of Ford’s parts suppliers in Eaton Rapids, Michigan. Ford suffered a parts shortage as a result of Meridian Magnesium Products’ plant going offline, and production of the company’s most popular vehicle ground to a halt. Last week, we reported that F-150 production was temporarily offline. At the time, it wasn’t immediately clear when production was going to get back on track. Now, we have a date. Ford stated on Wednesday that production would restart at the Dearborn plant this Friday, May 18. On Monday, F-150 production at the Kansas City truck plant will restart, as will Super Duty production at the Louisville truck plant. Getting production back on track, however, turned out to be a major operation.
After the fire, Ford quickly mobilized to remove 19 dies that were critical to making magnesium parts for the F-150. Ford commissioned Russian Antonov An-124 cargo plane – just one of 21 of its type in the world – to fly one die, weighing 87,000 pounds, to Nottingham, England in around 30 hours. Ford expedited the customs process to move it to Meridian’s UK plant to get parts production back on track.
Returning to normal
Until the Eaton Rapids plant is totally back online, Ford will fly manufactured parts back daily to Dearborn from the UK. An expensive effort, to be sure, but Ford is losing hefty revenue (and profits) for every day F-150 production is offline.
Hau Thai-Tang, Ford’s executive vice president of Product Development and Purchasing said in a Wednesday media briefing:
“Faced with unexpected adversity, the Ford team, including our global supply partners, showed unbelievable resiliency, turning a devastating event into a shining example of teamwork. Thanks to their heroic efforts, we are resuming production of some of our most important vehicles ahead of our original targets.”
Ford sells an F-Series truck every 35 seconds in the U.S. alone
In the day-to-day, Ford relies on the F-150 for nearly a quarter of all its sales. Last year, the company sold nearly 900,000 F-Series trucks just in the United States. that works out to one truck every 35 seconds – 24 hours a day, 365 days a year. During the time the Dearborn, Kansas City and Kentucky truck plants have been offline, Ford states it didn’t produce more than 10,000 trucks. While the company contends dealer inventory is still strong and customers should be able to get the truck they want, losing that much production capacity would hurt any automaker.
When a company like Ford produces the most popular vehicle in America, it makes sense to go to whatever lengths are necessary to get production back on schedule. Ford expects the lost production to impact share prices by 12 to 14 cents per share this quarter, but also stated they believed they could make up for lost production. The company also reaffirmed adjusted earnings for shareholders of between $1.45 and $1.70 per share this year.
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