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Ford cuts production at 5 plants, has big backload of cars


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March 25, 2013
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DETROIT — Ford said on Tuesday it plans to idle five North American vehicle assembly plants for a total of 10 weeks to reduce inventories of slow-selling models.

The plants affected include three assembly plants in the United States and two in Mexico, the company said in a statement. The vehicle models include the Ford Fusion and Lincoln MKZ midsize sedans, the Ford Focus compact car, the Lincoln Continental and Ford Mustang, Ford Fiesta and the Ford Transit van.

Ford said the Cuautitlan assembly plant that builds the Fiesta would be idled for three weeks. The Hermosillo, Mexico plant that builds the Fusion and MKZ and the Flat Rock, Michigan, factory that assembles Continentals and Mustangs will be idled for two weeks each. The Michigan Assembly plant that builds the Focus will be idled for one week, and the Kansas City assembly line that builds Transit vans will be down for two weeks. Ford did not give dates for the temporary shutdowns.

The factories involved employ more than 15,000 people, according to Ford's website. The company did not say how many of those workers would face temporary layoffs.

As of Sept. 1, Ford had 111 days' worth of unsold Mustangs, 87 days' supply of Fusions, and a 103 days' supply of Transit vans, according to Automotive News. Dealers had enough unsold Lincoln Continentals to last 162 days. Automakers aim for 65 to 70 days of inventory of most models.

Ford and rival General Motors have wrestled most of this year to rein in high inventories of passenger cars as consumers have shifted to buying pickup trucks and sport utility vehicles. Production cuts slice into revenue, but also could help the automakers avoid deeper price cuts on vehicles they can sell.

Reporting by Joe White


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Auto sales were very strong during the past several years post recession partially due to extremely low interest rates, but I believe the peak of auto sales is behind us. With that said, there may see a temporary resurgence of auto sales due to the hundreds of thousands of vehicles that were flooded by the hurricanes, most of which will be more than likely be classified as totaled by insurance companies.