Bloomberg News

Ford Plans Two Weeks Off at Focus-C-Max Plant to Trim Supply (1)

October 22, 2013

Ford Motor Co. (F:US) scheduled two weeks of down time at its factory that assembles the Focus compact and C-Max hybrid cars to trim inventory after the first drop in U.S. auto sales in 27 months.

Ford’s Michigan Assembly Plant in Wayne, Michigan, near Ford’s headquarters in Dearborn, will shut the weeks of Oct. 28 and Dec. 16, Kristina Adamski, a company spokeswoman, said in an e-mail. Days supply of both models rose after industrywide U.S. sales of cars and light trucks slipped 4.2 percent in September.

Chief Executive Officer Alan Mulally’s mantra to align production with demand has led Ford to post record profit margins in North America of more than 10 percent in an industry where 5 percent is considered respectable. Ford is boosting output of other models such as F-Series pickups and Fusion mid-size cars as the industry remains on track for its best year since 2007.

“They don’t want to get ahead of themselves,” Alan Baum, an independent auto analyst at Baum & Associates in West Bloomfield, Michigan, said by telephone. “Ford has been focused on keeping their pricing in check. Their operating margin is in double digits. Nobody else is there and they’re obviously very proud of that.”

Inventory Expands

Ford began this month with 122 days supply of the C-Max and 71 days of the Focus, according to the Automotive News Data Center. Inventory of both models rose from 108 days and 58 days, respectively, at the beginning of September. Automakers generally try to carry about 60 days supply of inventory per vehicle.

Focus deliveries in the U.S. rose 1.1 percent to 188,654 this year through September, according to a Ford statement released Oct. 1. Sales of the C-Max, which Ford introduced as a new model in late 2012, climbed to 28,254 from 969 in the year-earlier period.

Ford rose 1 percent to $17.67 at 9:52 a.m. in New York. The shares surged 35 percent this year through yesterday, compared with a 22 percent gain for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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