Automakers continue to adjust for lagging car sales
Ford announced on Tuesday that it plans on idling five North American vehicle assembly plants in an effort to reduce inventories of slower-selling models, mostly cars.
Two Mexican plants, the Cuautitlan plant that builds the Focus and the Hermosillo plant that builds the Fusion and Lincoln MKZ sedans will be temporarily shut down for three weeks. The Flat Rock factory in Michigan that assembles Continentals and Mustangs will be idled for two weeks and the Michigan Assembly plant that produces the Focus and C-Max hatchback will idle for one week. The Ford Transit van that is assembled in a Kansas City factory will be offline for two weeks.
“We are continuing to match production with customer demand, as we always do, and we are on track for our dealer inventories to remain at planned levels by year-end,” a Ford spokeswoman told us in an emailed statement.
Ford did not give dates for the temporary shutdowns, but according to Automotive News, the Kansas City shutdown will last from September 25 through October 1 and will not affect F-150 production. Altogether, the five plants employ over 20,000 people, according to Ford’s website, and UAW workers in the U.S. plants will receive 80 percent of their regular pay and will be placed on temporary layoff.
Large inventories of unsold vehicles are to blame for the temporary production halts. For the majority of models, automakers aim for no more than 70 days’ worth of inventory. According to Automotive News, as of September 1, Ford has 111 days’ worth of unsold Mustangs, an 87-day supply of Fusions, 103-day supply for the Transit van, and a whopping 162-day supply of unsold Lincoln Continentals.
The Transit van production shutdown might be due to lower sales for the year and because of the recall Ford issued in June for over 400,000 Transit vans.
The remaining shutdowns are due to lagging car sales affecting the whole industry as consumer demand shifts to crossovers, SUVs, and trucks. Ford brand car sales have dropped a staggering 20 percent while overall car sales in the U.S. have fallen 12 percent.
In October of last year, Mustang production was temporarily halted due to poor sales and three plants that produce the F-150, Escape, Lincoln MKZ, Fusion, and Fiesta models were also idled for two weeks.