Ford Trims Production at Five Plants in North America as U.S. Sales Slow -- Update
September 19 2017 - 5:38PM
Dow Jones News
By Christina Rogers
DETROIT -- Ford Motor Co. said Tuesday it will temporarily idle
production lines at five North American plants, including three in
the U.S., the latest in a series of moves by U.S. auto makers to
cope with slowing vehicle sales and rising industry capacity.
Ford says it is scheduling downtime at the factories to whittle
down unsold-car inventory on dealer lots. Collectively, these five
assembly plants, two of which are in Mexico, employ tens of
thousands of workers, who will be put on temporarily layoff during
the down weeks. The production hiatus ranges from one to three
weeks, depending on the factory.
The move mostly affects factories building Ford's passenger
cars, including the subcompact Fiesta and bread-and-butter Fusion
sedan, whose sales have been hit hard by the shift in consumer
demand to larger crossovers and SUVs.
Ford is also taking down a line at its Kansas City Assembly
plant, where it builds the Transit van, to fix a recall disclosed
in June.
Ford executives have signaled throughout the year production
cuts may be needed to counter slowing U.S. sales. While it has
largely resisted permanent layoffs, opting instead to schedule
downtime when needed, the company's inventory levels have crept up
in recent months.
General Motors Co., meanwhile, has cut thousands of jobs this
year at several passenger-car plants in the U.S. in response to a
pullback in consumer demand for small cars and family sedans.
"We are continuing to match production with consumer demand, as
we always do," Ford said in a statement.
Ford has made other cuts this year, temporarily laying off 130
workers at its assembly plant in Avon Lake, Ohio. At the time, the
company said the layoffs were expected to last until a newer
version of its heavy-duty commercial trucks launched in
September.
The cutback is the latest sign that U.S.-based auto makers are
struggling to keep supplies in check as U.S. auto sales continue to
weaken this year, following seven years of uninterrupted
growth.
Last month, U.S. light-vehicle sales fell 1.9% from a year
earlier, according to Autodata Corp., and the industry's annualized
selling pace, a measure of how sales are tracking for the full
year, came in at a lower-than-expected 16.14 million vehicles in
August.
The Japanese auto makers, however, have been more bullish on the
U.S. market.
Honda Motor Co. on Monday announced it was adding 300 workers to
its Ohio assembly plant, anticipating strong demand for a
redesigned Accord going on sale this fall. Toyota Motor Corp. has
also expanded its workforce in Kentucky, hiring 900 workers there
earlier this year, forecasting strong sales of its Camry family
sedan.
Ford's sales fell 2.1% on the year in August to 209,029
vehicles, as demand for SUVs cooled. But it posted a 15% surge in
sales of pickup trucks, its biggest profit generator.
Detroit's Big Three auto makers, which used to be known for
sacrificing profit margins to keep factories running, have in more
recent years vowed to keep output in line with demand for their
vehicles.
Fiat Chrysler Automobiles NV said last week it would shut down
an assembly plant in Windsor, Ontario, for five weeks starting next
month, citing a need to "balance production" of two minivans it
makes. One needs to be re-equipped to meet safety regulations.
In June, General Motors said it would extend its typical summer
shutdown at certain U.S. factories and has laid off thousands of
workers this year related to slow passenger car sales.
--Chester Dawson contributed to this article.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
September 19, 2017 17:23 ET (21:23 GMT)
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