Ford Idling Production At Several Plants to Reduce Inventories
Kansas City F-150 Production, Escape, MKC Lines Halted
While many other automakers are putting on a happy face in the face of warning signs of a declining new car sales market, Ford has been frank about the headwinds it foresees in the quarters and years ahead. Today, Reuters is reporting that Ford will idle production lines at several of its plants to rationalize inventories and prevent the need for excessive incentive spending to move models off lots. The F-150 line at the Kansas City assembly plant will be idled for one week. Transit production at the plant will continue uninterrupted. Dearborn Truck, the main plant for the F-150, will continue production without interruption. At the end of September, Ford had an average of 95 days of inventory of F-150 trucks. A 60-day inventory is considered optimal.
The Louisville Assembly plant, which builds the Ford Escape and Lincoln MKC compact crossovers, will stop production for two weeks. Two plants in Mexico that build the Ford Fusion, Lincoln MKZ, and Ford Fiesta will also be temporarily idled to reduce inventories. Ford had earlier warned investors of the need of inventory adjustments in the second half of 2016. Per UAW rules, idled plant workers will still be paid their full wages during the temporary shutdowns.