Ford to stop production of the F150... tonight?

[coldsteelva]

No manufacturer stocks parts any more. They all use Just-In-Time production. Chrysler had the same problem with a seat supplier last week I believe. If you can't complete the units, you don't even start the units. This means that all the line workers stay home and the other suppliers that expect regular orders to come in are impacted because if the mfr. can't get instrument clusters made, they don't need seats, lights, wheels, etc. The ripple effect can be huge.

 

[yanmars]

Years ago Henry Ford wanted to make everything in house so there would not be such issues. Those days are gone.

 

[/pine]

Years ago Henry Ford wanted to make everything in house so there would not be such issues. Those days are gone.

His original business plan was to sell enough cars/trucks so he could could continue to sell parts not continue to sell vehicles...

 

[MinnesotaEric]

Ford will halt all production of its popular F-15 pickups

This has got to hurt. My heart goes out to the people who apparently just were told not to show up to work.

Ford pioneered the just in time parts inventory system that is admired and used throughout the manufacturing world. The downside of this lean inventory system is when a key supplier cannot deliver parts and the entire line must shut down.

 

[MinnesotaEric]

Here's a little bit more detail:
Possible F-150 shortage? - Ford Truck Enthusiasts Forums

This is the one I meant to post...more details.
Super Duty Production Halt? - Page 2 - Ford Truck Enthusiasts Forums

Most investors (I used to own F) believe that focusing on trucks only will make Ford into a smaller, less flexible company, that will create headachs for the next round of managers in the C-suite. With oil prices heading higher, we know people start buying cars when oil hits 75 a barrels and they. Today traders bought next month's oil contract with both hands on a pullback at $70.58 on the thesis that oil will continue to rise. Just two hours ago, Bank of America announced that it believes that we will see $100 a barrol oil again within the next year-to-year-and-a-half and this atop a pile of background chatter within the business that oil prices are expected to continue to rise for a variety of reasons.

The cost of energy is the primary reason investors think that Ford is making a mistake to build trucks only.

 

[mcfarmall]

Correct, Eric. The only way to avoid shutdowns is to completely control your supply chain but there are much added costs to doing so. It also depends on your product. Pharmaceuticals are different than automobiles and for some pharma products it pays to have critical supplies in-house. Packaging materials can be sourced out to 2 or 3 places and you can be ok but if your API (active pharmaceutical ingredient) is choked by your supplier it can be disastrous.

The temporary shutdown of the pickup plants is a different story altogether from Ford's announcement that pretty much all car/sedan/crossover lines are going to be phased out in lieu of focusing on trucks and SUV's. No, I don't consider the crossover as an SUV...they are just coolified minivans.

 

[zing]

They will get paid, this is not their fault.

What? No they won't get paid and it doesn't matter if it is not their fault. The employees are being laid off. They will (hopefully/usually in a short term layoff case like this) get hired back. If there needs to be overtime in order to make up the production shortfall, they may even be able to make back some of their lost wages by doing OT later on. But they will not be paid by Ford while they are laid off and sitting at home.

 

[mcfarmall]

Just like land, they aren't making any more oil. What we got is what we got and that's it.

 

[randyjs]

The UAW members will get unemployment plus sub-pay, combined it will be about 95% of their normal 40 hour check. The ones who loose out are all the other suppliers who will be getting laid off because Ford won't need the parts that they build.

 

[Thomas]

Anyway you look at it like stick push into moving spokes.