Ford's Truck Glutmare Continues
As this 1999 New York Times article illustrates, Ford's Wayne factory was once Ford's golden goose. The factory cranked-out about $3.7b profit per year building Expeditions and Navigators. Tempus fugit. Nine years later, Yahoo! Business reports that the golden goose will be put into a cryogenic freeze for at least nine weeks, starting June 23rd. The unusually long "temporary shut down" could well become permanent. The Michigan Truck plant builds the Expedition and Navigator. According to the Kansas City Star, "Expedition sales are down 31 percent for the first five months of the year, and Navigator sales are off 22 percent, according to Autodata Corp. Ford had a 124-day supply of Navigators and a 100-day inventory of Expeditions." It seems safe to say that production for the 2008 model year will be over by the time Michigan Truck shuts down next Monday. If future production of these barges is ever needed–a highly doubtful proposition– one of Ford's underutilized pickup truck factories could take over. As for costs savings, United Auto Workers get 95 percent of their pay while the factory is "off-line." This "right sizing" an expensive business, but Ford had to do something to shut off the production spigot.
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It won't be long before we start to see SUV nameplates get the axe. Perhaps an SUV Deathwatch series is in order? We already know the Jeep Commander and GM Trailblazer/9-X, etc. are goners...
Though not really a Ford comment, I noticed the local GMC dealer has a banner out front that says "up to $12K off and 0% interest"... Ouch... On the other hand my Nissan Titan friend is restricting his miles. Costing him $160 a week to drive his truck. Now only to work and back - ONLY. That's $80 a week. He is still unhappy. Truck is nearly new so he's not going to want to get rid of it.
Michigan Truck seems to be the most precariously perched of the plants under fire. There are supposedly two possibilities for it that don't include closure: 1) Build the F-100 starting in late 2010 as well as an SUV built on the same shrunken frame (with Ecoboost, many are thinking mid-to-high 20s for highway mileage for the 275hp/280tor model, so it has a shot). 2) Tool it up for C1-2 production starting in 2010 (Focus, Escape (Kuga), et al), although the Cuautitlan plant was supposed to support the overflow C1-2 capacity along with B production. Although, Ford could be thinking of bringing additional B-models to NA and consolidating some production from SA. They really only need three truck plants at current sales (Rouge, Kentucky Truck, Kansas City) and it's not clear if the F-100 will boost sales significantly enough to justify the fourth plant. But, as they say, we shall see...
"United Auto Workers get 95 percent of their pay while the factory is "off-line."" From the way I understand the UAW pay structure, the workers get 95% of their take home pay. That's after taxes and insurance all the other stuff they take out. So it's not as great as it seems, although I would still love it if my job offered me that.