Ford to restart F-150 output Friday following supplier fire

UPDATED: 5/17/18 1:47 pm ET - adds Mercedes update

Ford Motor Co. will restart production of the F-150 pickup at a Dearborn, Mich., factory Friday after more than a week of downtime resulting from a fire at a key supplier plant in mid-Michigan.

The automaker said F-150 production at a Kansas City, Mo., plant and Super Duty production at its Kentucky Truck Plant near Louisville will resume by Monday. About 7,600 workers who build the F-150 had been placed on temporary layoff while output was suspended; workers who built the Super Duty continued working, building different vehicles at the Kentucky plant.

Ford said it will see an adverse impact on second-quarter earnings of between 12-14 cents per share because of the lost F-150 and Super Duty production. Its full-year guidance remains unchanged at between $1.45 to $1.70 per share.

The fire at the supplier plant broke out early on May 3 and F-150 production at Ford"s Kansas City factory went down May 7 and the Dearborn factory was idled May 9. 

"Unexpected adversity"

"Faced with unexpected adversity, the Ford team, including our global supply partners, showed unbelievable resiliency, turning a devastating event into a shining example of teamwork," Hau Thai-Tang, Ford"s executive vice president of product development and purchasing, said in a statement. "Thanks to their heroic efforts, we are resuming production of some of our most important vehicles ahead of our original targets."

The fire at Meridian Magnesium Products of America in Eaton Rapids, Mich., has rippled across the auto industry. Ford was the first automaker on-site at the supplier, roughly 24 hours after the fire.

It was able to enter the heavily damaged supplier plant first because it brought along Walbridge, a key construction supplier, who was able to assess the structural integrity of the building.

A work crew located all 19 of Ford"s tools -- undamaged -- and extracted them over 48 hours. Ford said one die weighing 87,000 pounds was moved from Eaton Rapids to Nottingham, U.K., using an Antonov cargo plane, one of just 21 in the world that can handle such payloads, in just 30 hours door to door.

Ford said it transported the die from mid-Michigan and shipped it from an airfield in Ohio and received a U.K. import license for the die just two hours before the plane touched down. The whole process would typically take 10 days, Thai-Tang said.

“The amount of teamwork and human ingenuity … shows you what the global Ford team can do when we work together,” Joe Hinrichs, Ford’s president of global operations, said on a conference call with reporters Wednesday.

Meridian now is producing parts for the F-150 at two locations -- Eaton Rapids and Nottingham. Production of bolsters for the Super Duty also is restarting at the Eaton Rapids plant.

Meridian makes three parts for Ford, including the bolsters to reinforce the radiator on the F-150 and Super Duty pickups as well as some large SUVs.

Hinrichs declined to say how many pickups Ford lost during the downtime, although James Albertine, an analyst with Consumer Edge Research, last week estimated it could lose as many as 15,000 pickups a week.

Ford plans to make up for some of the lost production by shortening a planned summer shutdown at the Dearborn and Kansas City plants to one week from the usual two weeks, Hinrichs said. Additionally, workers will be given the opportunity for voluntary overtime.

Ford had an 84-day supply of F-series pickups at the beginning of May and Hinrichs has said the incident will have no negative impact on sales. U.S. sales of the F series are up 4.1 percent this year through April.

The fire also affected General Motors, Fiat Chrysler Automobiles, Mercedes-Benz U.S. International Inc. and BMW of North America, although they declined to say how long output of some vehicles, including the Chrysler Pacifica, Chevrolet Express and BMW X5 and X6 could be slowed.

Mercedes poised to restart

Mercedes-Benz USA said it assigned team in the U.S. and Germany, working around the clock, to resume parts flow to the automaker"s plant in Vance, Ala., since the fire. The factory produces the GLE, GLS and GLE Coupe SUVs and crossovers for global markets and the C-class sedan for sales in North America.

"We were able to build some SUVs the week of May 7 and 11," Mercedes said in a statement on Thursday. "Between May 14 and 18, we were not able to build SUVs due to lack of parts. 

"We have worked with our supply base to reestablish part flow and we anticipate getting the first round of parts next week to slowly begin ramping up SUV production operations. We are optimistic that as we go forward we will be able to add more production -- gradually getting back to our normal production operations."

Mercedes said all its U.S. workers were given the option to work on a modified production schedule. 

Automotive News staff contributed to this report.

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