Published: Fri, May 11, 2018
Finance | By Gustavo Carr

Magnesium Supplier Fire Stops Ford F-150 Production

Magnesium Supplier Fire Stops Ford F-150 Production

Ford said it's working to mitigate U.S. production losses and that its three-month supply of F-Series trucks in dealers' inventories should offset shortages in the near term, but if the shutdown lasts several weeks, which reportedly could be the case, specific versions of the F-150 would become scarce. The plant supplies other automakers as well, but so far only one - Fiat Chrysler - has reported an impact on production. Mercedes' facilities in Alabama have adjusted hours in response to the supply interruption.

The good news for Ford is that dealer inventories are now 84 days on average, which will ensure supply for consumers at the retail level over the short term. "We're confident that any impacts will be short term".

Kentucky Truck Plant employs almost 7,600 full-time hourly workers, having added 2,000 for Super Duty production in conjunction with a 2017 investment of $900 million. The truck production half of Ford's Kansas City plant is shut down for the week.

The news comes as Ford becomes even more reliant on its popular F-Series trucks. The Kansas City facility employs some 3,600 people while the plant in MI has 4,000 employees. The company produced more than a million pickup trucks in 2017, while sales in the USA totaled around 896,000 to mark a 12-year high.

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A fire on May 2 at a Eaton Rapids, Michigan plant operated by Meridian Lightweight Technologies stopped production of die-cast components used in F-150 and Super Duty trucks.

Ford says it's working with suppliers to limit the impact on production. It's a key profit generator for Ford. The parts supplier itself, Meridian Magnesium Factory, suffered from a serious fire and resulting explosion which has caused serious damage. The date of relaunching of the Meridian Magnesium plant is still unknown.

The shutdown could last several weeks. The Avon Lake, Ohio plant makes commercial grade trucks, including the "chassis cab" F-350, F-450 and F-550, along with the big F-650 and F-750 heavy duty trucks. But if the parts shortage continues, inventories of F-150 trucks at dealerships would dwindle.

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