The Kansas City Star reports that sluggish sales of Ford's former cash cow, the F-150 pickup truck, have led to a dramatic production slow-down. For two weeks in October, FoMoCo will idle half their operations at the pickup-producing Claycomo plant. Some 2100 (of 4400) hourly employees will be paid for doing naught. And thanks to "competitive operating agreements" negotiated with the United Auto Workers, returning employees will work 10-hour shifts for four weekdays with Fridays off. Currently, Ford dealers are holding 185,400 F-series trucks in their lots, which represents a 72-day inventory. (This after Ford's Norfolk F-150 plant was permanently shuttered last year.) Hot on the heels of GM's pickup truck pull-back (now a full stop, obviously), the F-150 slowdown is more proof that the entire pickup segment is undergoing a radical contraction. The trend will hit The Big 2.8's bottom lines but good.
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“Some 2100 hourly employees will be paid for doing naught.” The UAW is a significant factor in the American automakers struggle to compete.
RF: I cannot disagree with your contraction statement…at least while the housing downturn continues.
That said, while a contracting segment—it is still sizable and worth investing in—much more so than minivans and truck based SUV’s.
Accordingly, Ford must make a best in class F150 during the 2009 redesign. They have no excuse not too given that the bar has been set by the new Tundra and Silverado….they know what they must do to exceed the competition.
This objective has to be one of the top 2-3 priorities for Mulally on the product side. Net he needs to prove he is worth the millions on this one.
They also need to address that fire issue with these things ASAP. That’s certainly not helping sales any.
News Flash:
There is a new player in this game with a very competitive product! This player has the production capacity to cause real harm to the existing establishment.
While I will admit that Toyota is not the only issue at play here I dont think anyone should be surpised by the lose of light truck sales for Ford. The reduction in the flow of cash from this cow was given and Ford should have planned well for this event.
This is why smart companies do not rely on EXISTING cash-cows and continuiously explore new markets and niches to create and grow new cash-cows.
Orian: Just for clarity sake—there are no fire issues specific to the F150. The faulty cruise control issue is a broader Ford issue that hit several vehicles from 1994-2002….much like the Toyota engine sludge issue—the Ford problem wasn’t specific to one vehicle. Not an enviable position to be in…and much like Toyota, Ford had to be brow beaten into a solution.
The 2009 F150 has to be the best out there—no excuses.
“Ford dealers are holding 185,400 F-series trucks in their lots, which represents a 72-day inventory.”
Which just shows how bad things are for them. They can’t get the UAW to strike them and get those inventories under control.
I’ve been saying for a long time now that light trucks are headed back to the 25% of the US light vehicle market which was the norm for many decades until the monster truck fad took that number up over 50%. It is happening.
This is the trend that puts them into chapter 11. There simply isn’t a way to recover the profit these vehicles generated, no matter how great a hit they may come up with. F-150 sales alone topped 650,000 in a year in their peak and these vehicles were selling at ~100% profit. The next F-150 is going to be a hit but it costs more to make, will sell for the same price, and will sell in less volume. Big trouble.
You had to be hiding under a rock, blindfolded with ear plugs not to see the “pick up” train coming.
Ford is cutting back production is confirming what everybody knew.
Here is Toyota sitting on a brand new Billion dollar plant in Texas to assemble pick ups. Good thing they car afford to step on a “banana peel”.
Some 2100 (of 4400) hourly employees will be paid for doing naught.
That must be a hard sell for the UAW calling for a strike…
“ok brothers, would you rather get paid and sit at home, or not get paid and stand in the rain waving a placard ?”.
umterp85
Accordingly, Ford must make a best in class F150 during the 2009 redesign. They have no excuse not too given that the bar has been set by the new Tundra and Silverado….they know what they must do to exceed the competition.
I agree, but the reality is that it’s unlikely. The 2009 F150 is NOT a “full” redesign like the new Silverado/Sierra or the new Tundra. The 2009 F150 is going to be a big “facelift” according to Ford themselves. Ford has said that it’s not a “full” redesign due to lack of resources. Also, the much-hyped TwinForce engines are going to be delayed.
Also a point must be made that F-Series sales continue to tumble despite the fact that the Superduty was redesigned for 2008, and that Superduty sales account for up to 40% of F-Series sales.
Things for Ford are going to get worse before they get any better.
You had to be hiding under a rock, blindfolded with ear plugs not to see the “pick up” train coming.
All these items are in great supply around Detroit, apparently. Because there are a lot of shocked people.
Isn’t cutting back on production what Ford needed to do in the first place? Why is this bad news?
The new F-150 is moving onto a new platform. I would call that a pretty significant update. The suspension is updated, the transmission is brand new, the cabs are redesigned, the exterior and interior are overhauled. In fact, Fields pushed back the launch and started more aggressive changes on the pickup about 18 months ago because he didn’t feel it was going to be enough.
From what we know, the truck starts sales in the summer. The Boss appears by the end of 2008. If the twin force makes it to production in the F-150, it will show up in mid 2009 along with the diesel according to most sources with all these engines trickling up and over to the Expedition and Super Duty. I’m not terribly worried about the F-150 remaining competitive.
This also isn’t a particular surprise. Most thought that the housing industry was going to recover by the end of the year, but it in fact probably won’t recover until late 2008. So, accordingly, F-series sales will be lower – as will Silverado and Dodge sales for the year, most likely.
Contrary to popular belief, Ford has accounted for most of this in their recovery plan if you read their SEC filings. This is hardly Chapter 11 for them. Everything else in their inventory is in line, many of the products suffer fron inventory of less than the probably 60 days needed in such an extensive (bloated?) dealer network.
It’s going to be rough for the F-150 through summer of next year, but the 2009 will be a good redesign.
I’m sorry for the workers, but glad to hear FISO sales are sluggish.
RobertSD, I’m interested in knowing where you got your info from regarding the next-gen F150. From all the rumblings from Ford (and Ford insiders) the word is that the platform is NOT all-new. Besides, looking at the reality of things for the past few years, a new platform would be stretching it. The 2004 F150 had a completely new platform. Word is that the 2009 F150 gets an update of the P2 platform. Considering that Ford suffered some big losses between 2004 and now, I doubt they had the available funding to make ANOTHER all-new platform right after making the P2. The 2004 redesign was a huge investment for Ford.
All the Ford insiders are saying the same thing: that the 2009 model is NOT a complete redesign, but rather a big facelift or overhaul of the current model. And there are a lot of rumours that the TwinForce engines have been delayed and won’t come until 2010.
Also, the interior will simply be an evolution of the current one, and not a radical change like the 2004 model was.
Honestly I wonder why the F150 would NEED a complete redesign. How many different ways are their to architect a pickup truck? Didn’t the structural analysis guys do their work well in the last redesign?
No matter what they do, pickup truck sales are going to continue to slide. The weak housing market is only a small part of the problem. The big problem is that people who don’t need to commute in a truck everyday are not going to buy one in the era of $3/gallon fuel. This is also putting a lot of lightly used trucks on the used market as the posers switch to cars and get out of their 2-5 year old never-seen-mud trucks.
Ford needs to keep the F-150 competitive, but they would be fools to do a 100% redesign as there is not enough they can do to fundamentally improve the product with a complete redo that can’t be done with tweaks, new engines, new transmissions, etc. Look how little ROI GM is getting on the GMT900 version of it’s pickups. They could have gotten as much sales help out of a thorough freshening as they have gotten from a 100% redo.
What Ford they really needs is some good small trucks to serve that abandoned market.
RobertSD is right, the new F-150 is a major update, much more than a facelift. The whole front stub is completely new, suspension/steering/frame/etc. It will be class leading.