Ford to shut down Michigan plant for 2 weeks amid drop in sales

Article by Anita Panait, on October 25, 2013

Ford Motor Co. will temporarily shut down production at its Michigan Assembly Plant to reduce inventory in response to a recent dip in vehicle sales in the U.S., the first in 27 months. The facility, which builds the Focus compact and C-Max hybrid cars, will be shut down the weeks of Oct. 28 and Dec. 16, spokeswoman Kristina Adamski told Bloomberg in an e-mail.

Days supply of the Focus and the C-Max grew as industry-wide US sales of cars and light trucks dropped 4.2% in September 2013. Ford chief executive Alan Mulally's philosophy of aligning output with demand has allowed the carmaker to post record profit margins in North America of over 10%. Ford, however, is increasing output of other models like F-series pickups and Fusion mid-size cars. Alan Baum, an independent auto analyst at Baum & Associates, remarked that Ford does not “want to get ahead of themselves."

He said that Ford has been focused on keeping their pricing in check. He noted that there is no other carmaker whose operating margin is in double digits.

Ford started October with 122 days supply of the C-Max and 71 days of the Focus, from 108 days and 58 days, respectively, at the start of September, according to the Automotive News Data Center.  

Automakers typically have about 60 days supply of inventory per vehicle.  Ford has posted a 1.1% hike in Focus sales in the US to 188,654 units in the first nine months of 2013. Ford sold 28,254 C-Max in the nine-month period.

Topics: ford, plant, production, sales

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