Barclay's Report Confirms TTAC's Story About F-150 Aluminum Difficulties
Automotive News is reporting that assembly plants in Dearborn and Kansas city will be shut down for a total of 13 weeks as it retools to switch production to the all new F-150 pickup truck that has an aluminum body. The launch of the 2015 F-150 will be closely watched, as Ford and its competitors see how consumers accept the lighter, more expensive truck.
Meanwhile, an analyst report seems to confirm TTAC’s initial story that Ford was forced to delay production of the new truck by up to three months due to difficulties with the new aluminum body.
Brian Johnson, an analyst with Barclays Capital, noted that
“There has already been a delay in the production schedule, likely due to challenges in stamping, riveting, and welding of the aluminum,” Johnson said in a report published earlier this week. “Moreover, Ford also faces risks with regard to potentially higher warranty expense and customer acceptance (large pickup buyers may be resistant to change, and may be skeptical of the new truck’s durability).”
The success of that launch will have a significant impact on FoMoCo’s 2014 profits. In 2013, F series trucks (which include the heavier duty pickup lineup that starts with the F-250 and runs through the F-650 medium duty truck) represented 31% of Ford’s light vehicle sales . Morgan Stanley estimates that the F series accounts for 90% of Ford’s global profits.
The increased downtime for the F-150 launch might lower Ford’s North American pretax profit by $800 million this year, according to Buckingham Research Group analyst Joseph Amaturo.
It’s not just a question of how they start making and selling the new truck either. Ford needs to manage production and inventory of the outgoing model if they want to maximize profits. The automaker needs to build up a large enough inventory so that when the plants shut down dealers are not affected. At the same time it doesn’t want to accumulate too many, leading to discounts and incentives.
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Quote from the article: “There has already been a delay in the production schedule, likely due to challenges in stamping, riveting, and welding of the aluminum,” Johnson said in a report published earlier this week. “Moreover, Ford also faces risks with regard to potentially higher warranty expense and customer acceptance (large pickup buyers may be resistant to change, and may be skeptical of the new truck’s durability).” When I worked in IT, we called this sort of thing "testing in production". You know, you make a big change to something, you try to test it as best you can, but the ultimate tests come when the change goes into production simply because you can't - or don't or won't - imagine all the possible permutations of problems that will occur. So, Ford truck buyer beware: you're going to be a tester for Ford. It looks like they've not ironed out all the problems yet - any maybe they don't have any idea what the problems are going to be. But Ford will find out, at buyers's expense.
Ford really bit off more than they can chew. So far this has been a disaster...and there's no appreciable difference in going with aluminium. 700 pounds ON YOUR HEAVIEST MODEL is a joke. Especially when your competition is already 500 pounds lighter. So a net savings of 200 pounds is just not worth this hassle. They could have saved that by making the F-120 a 1/2 ton truck again...and not a bloated turd.