As part of reporting a $7.2 billion profit for 2013 on Tuesday, officials announced plans to increase shutdown time at its two full-size pickup trucks plants in the U.S. to about 13 weeks. The shutdown period -- up from five in 2013 -- will include 11 weeks at Dearborn Truck Plant in Michigan and two weeks at Kansas City Assembly Plant in Missouri.Watch video
DEARBORN, MI- The launch of the next-generation F-150 is even more critical than some may have first expected to Ford Motor Co.’s success in 2014 and beyond.
As part of reporting a $7.2 billion profit for 2013 on Tuesday, officials announced plans to increase shutdown time at its two full-size pickup trucks plants in the U.S. to about 13 weeks. The shutdown period – up from five in 2013 – will include 11 weeks at Dearborn Truck Plant in Michigan and two weeks at Kansas City Assembly Plant in Missouri.
Three of the shutdown weeks will occur in the first quarter, according to Ford Chief Financial Officer Bob Shanks. The extended shutdown is expected to dent the automaker's sales and revenue in 2014.
“When you look at the decline, year-over-year, that we’re expecting in North America’s results, it’s largely attributable to the F-Series,” he said during a conference call with media and analysts on Tuesday.
Ford expects North America pre-tax profit and wholesale volumes to be lower than in 2013, as well as net pricing to be slightly unfavorable. The capital spending, according to officials, is expected to tighten margins and trim pre-tax profit to between $7 billion to $8 billion. Ford reported an $8.6 billion pre-tax profit for 2013 – its second highest in the last decade behind $8.8 billion in 2011. Shanks described 2014 as a “preparation year,” as the company prepares to launch 23 all-new or significantly refreshed vehicles around the world — more than double the 11 global vehicle launches in 2013.
“I think this is sort of a preparation year, as we consolidate the gains of the past and then prepare for an even stronger growth in the future, starting with 2015,” he said. “It’s still going to be a very good year for us.”
At the center of that preparation will be the 2015 F-F150, which is expected to be a complex turnover. The new full-size pickup will be the first mainstream, heavy-volume vehicle to feature a nearly all aluminum-alloy body and all-new high-strength steel frame, helping shave up to 700 pounds off of the current model.
Following the unveiling of the next-generation F-150 earlier this month during the 2014 North American International Auto Show, Ford officials were confident that they could deliver a successful launch.
2013 Lincoln MKZ “We’ve had a lot of them recently, not all of them have gone as smoothly as we would have liked,” said Ford executive chairman Bill Ford Jr. “But our team is very confident in this launch.”
Ford has stumbled with some of its most recent launches, including the 2013 Ford Escape, which had numerous recalls, and the 2013 Lincoln MKZ, which was delayed due to product quality issues and lengthy inspections.
If Ford’s F-150 launch doesn’t go well this year, it could mean trouble for the Dearborn-based automaker’s reputation and profits.
“I don’t think it’s possible to overstate the importance of the F-150 launch for the Ford brand,” said Alec Gutierrez, Kelley Blue Book senior analyst. “We know hat the F-Series is really their bread and butter in terms of volume and in terms of margin.
“The F-Series contributes so much to the bottom line of Ford.”
Gutierrez said there “really is some concern” with the launch due to the revolutionary redesign of the next-generation pickup.
The 2015 F-150 is scheduled to arrive in dealership late this year, according to Ford. The company did not release pricing, performance or fuel economy estimates for the new pickup, which officials expect could continue the company’s pickup dominance.
In this June 28, 2009 file photo, a long line of F-150 pickup trucks is reflected in the grille of another F-150 at a Ford dealership in Centennial, Colo.F-150 is part of the Ford F-Series truck lineup, America’s best-selling truck for 37 consecutive years and America’s best-selling vehicle for 32 years.
KBB reports Ford is running a 70-day supply of F-Series, which is a healthy amount but isn’t an abundance of supply on the ground.
Dealers reportedly started stockpiling 2014 F-150 models ahead of the changeover. According to the Detroit News, some dealers have requested as many as 20 percent more F-150s than usual, fearful that the shutdown could strain supply of the extremely profitable vehicles.
According to KBB, the average price paid for a F-150 pickup was about $40,200 in 2013, up nearly $300 from 2012.
But a stumble during the next-generation F-150 vehicle launch could add a few bumps in the road for the automaker.
“They’ve got to get it right,” Gutierrez said. “If they run into any delays and things don’t go right, it’s definitely going to be an issue for them.”
In 2013, F-Series accounted for just over 30 percent of Ford’s 2.5 million vehicles sold in the U.S.