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Bloomberg: Ford to Idle Four Factories as Slowing Sales Bloat Inventory


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http://www.bloomberg.com/news/articles/2016-10-17/ford-to-idle-four-factories-as-slowing-sales-increase-inventory

 

 

Plants building F-150 pickup, Escape SUV to close temporarily

Automaker says it is matching production to slack demand
Ford Motor Co. is temporarily halting one of two plants that builds the top-selling F-150 pickup as it idles four factories this month amid slowing U.S. auto sales.
This week, Ford is shutting its Louisville, Kentucky, factory building the Escape and Lincoln MKC sport utility vehicles, as well as two plants in Mexico that make the Fusion sedan and Fiesta subcompact, according to an e-mailed statement. Next week, the second-largest U.S. automaker said, it will close the F-150 factory near Kansas City for seven days. And starting Oct. 31, the Louisville plant will be idled for another week, Ford said.
The plant closings follow last week’s shutdown of Ford’s Mustang factory in Michigan after sales of the sports car plunged 32 percent in September. U.S. auto sales are slowing as many analysts predict the industry won’t match last year’s record of 17.5 million cars and light trucks. Ford Chief Executive Officer Mark Fields has said the U.S. auto market has plateaued and that showroom sales are weakening.

 

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Saying it's "poor sales" is a bit disingenuous. It's normalizing inventory to match demand. Except for GM because they almost never do it, the rest of the industry is doing the same exact thing

Looking at GM and more so FCA of late it is 2007 all over again.... I think they are playing a game of chicken, with GM's plan is to bankrupt them and FCA plan to find a good suitor, which was Samsung that however has seem to have gone up in flames.

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When was the last time Ford idled the F-150 plants because of poor sales?

Only idling one plant and only temporarily to prevent an inventory glut before it occurs.

 

This is discipline. GM will keep making them and have to throw more and more cash on the hood.

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No, really?

 

Is there anything in print or on the web about that? Or is that just Detroit-area scuttlebutt? I'm curious.

http://www.bloomberg.com/news/articles/2016-08-27/fiat-chrysler-ceo-sees-samsung-as-potential-strategic-partner-isdm54q4

 

 

http://www.sammobile.com/2016/10/14/samsung-puts-magnetti-marelli-deal-on-the-back-burner-to-deal-with-the-galaxy-note-7-crisis/

 

I think it's more on the parts side, but as we race toward the recession next year or 2018 at the latest FCA debt is gonna be a shit show if rates start going up and demand drops. With the incentives they are pushing at this point I think cash flow is more important that profit. Ford is playing it smart and cutting production, pulling a play from the Honda playbook.

Edited by jasonj80
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Ford has registered sales declines in the U.S. every month this year since July. Sales were down 3% July 2016, down 8% in August, and down 8% in September.

 

YTD F series sales is at 596K, still up 5% over last year YTD. Only a negatard would describe that as "poor" especially when the entire market is down the last 3 months.

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YTD F series sales is at 596K, still up 5% over last year YTD. Only a negatard would describe that as "poor" especially when the entire market is down the last 3 months.

 

Ford's declines were much steeper than the entire U.S. light vehicle market in the last 3 months:

July 2016: Market up 0.7%, Ford down 3%

August 2016: Market down 3.5%, Ford down 8%

September 2016: Market down 0.5%, Ford down 8%

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What was the distribution of fleet sales by month last year? We know this year they were front loaded.

 

I'm not saying they weren't down, but saying they're "poor" is ridiculous.

I don't know why you're wasting your time arguing with him, not one of his 36 posts has done anything but shit all over Ford....
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Ford's declines were much steeper than the entire U.S. light vehicle market in the last 3 months:

July 2016: Market up 0.7%, Ford down 3%

August 2016: Market down 3.5%, Ford down 8%

September 2016: Market down 0.5%, Ford down 8%

 

 

We still have to look at a full year to see the complete trend since Ford is very fleet heavy which comes with significant quarterly swings as the orders are filled. The year started off good for Ford and now they are paying for it, but the sum is what probably needs to be analyzed at the end of the year.

 

And it's not an exaggeration to say Ford sales are "Poor" if they are overproducing and underselling the industry.

 

It's extremely difficult to be profitable in Ford's side of the business, profits are getting tighter and competition is strong, Ford's size and cost structure makes it hard to chase their leaner and younger competition on price alone. One of the reasons it's not growing capacity in the US is because they know they want to increase profits but not necessarily marketshare. Ford's marketshare will certainly decline significantly over the next few years but they should be able to recover or even grow once they are in the right segments. We are seeing that with Chevy right now, it took them long enough but they finally have the right portfolio for rapid growth and should easily take sales leadership during Ford's drought.

Edited by BORG
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I didn’t say that (or write that) correctly. Regular cab and SuperCab are exclusive to KCAP, but KCAP does produce all body styles …..However, DTP produces almost all retail trucks, (i.e., SuperCrews), whereas KCAP produces almost all of the F-150s sold to fleets, e.g., SuperCab & Regular Cab and a few special edition versions, too. I would think that any reduction in SuperCrew production at KCAP that week would be very small and can be easily picked up at DTP…..

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And it's not an exaggeration to say Ford sales are "Poor" if they are overproducing and underselling the industry.

 

If you look at the Days to Turn data at http://www.edmunds.com/industry-center/data/days-to-turn.html, that's what Ford did earlier this year. By July, Ford vehicles were in dealer inventory an average of over 90 days before being sold.

 

Ford had to idle those plants sooner or later before this situation got out of control.

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If you look at the Days to Turn data at http://www.edmunds.com/industry-center/data/days-to-turn.html, that's what Ford did earlier this year. By July, Ford vehicles were in dealer inventory an average of over 90 days before being sold.

 

Ford had to idle those plants sooner or later before this situation got out of control.

 

Did you just create an account to post nothing but negative things about Ford?

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Toyota would kill to have those "poor" sales for their trucks.

 

The truck plant in San Antonio (TMMTX) has a capacity of 200k units/year and the one in Baja California (TMMBC) is rated for 90k units/year, so you're not going to see Toyota pickup truck production levels comparable to F-Series anytime soon.

 

Nonetheless, in Sept. 2016 Toyota pickup sales set an all time record for the month and YTD. Inventories for both of Toyota's U.S. pickups are very lean, especially Tacoma.

Edited by rperez817
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