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Ford (F) Halts Production at 5 Plants to Reduce Inventory
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Ford Motor Company (F - Free Report) plans to temporarily shut down five assembly plants in North America, per a Reuters’ news. The decision to halt production at its Kansas City, Flat Rock and Wayne assembly plants and two plants in Mexico for a total of about 10 weeks has been taken to lower the inventory of slow-selling models.
In Mexico, production will remain closed at the Cuautitlan Fiesta line for three weeks and at Hermosillo Fusion line for two weeks. The Kansas City plant has already been shut for a period of two weeks. The Flat Rock, MI facility will remain idle for two weeks. The Wayne, MI plant will be idled for one week.
In recent times, auto giants such as General Motors Company (GM - Free Report) and Ford have been troubled by a high inventory of passenger cars. Consumers’ shifting pattern toward sports utility cars and pickup trucks can be attributed to this rise in inventory. For the first eight months of the year, passenger car sales of Ford declined 20%, whereas truck sales rose 2.4% and sales of sports utility vehicles increased 1%. According to Automotive news, as of Sep 1, Ford had 111 days' supply of Mustangs, 103 days’ supply of Transit vans, and 87 days’ worth of unsold Fusions. Ford is aiming at lowering the inventory to 65 to 70 days for most unsold models.
This halt in production will result in temporary layoffs of some workers. But the initiatives taken right now would better align the company for the future, including its employees. Moreover, though this temporary production halt will have some adverse effects on revenues, it could help the automaker avoid deeper price cuts of vehicles going forward.
Ford’s shares have gained 5.9% over the last three months, outperforming the 4.2% increase of the industry it belongs to.
Currently, both Ford and General Motors carry a Zacks Rank #3 (Hold).
Toyota has an expected long-term growth rate of 7%.
Daimler has an expected long-term earnings growth rate of 2.8%.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Ford (F) Halts Production at 5 Plants to Reduce Inventory
Ford Motor Company (F - Free Report) plans to temporarily shut down five assembly plants in North America, per a Reuters’ news. The decision to halt production at its Kansas City, Flat Rock and Wayne assembly plants and two plants in Mexico for a total of about 10 weeks has been taken to lower the inventory of slow-selling models.
In Mexico, production will remain closed at the Cuautitlan Fiesta line for three weeks and at Hermosillo Fusion line for two weeks. The Kansas City plant has already been shut for a period of two weeks. The Flat Rock, MI facility will remain idle for two weeks. The Wayne, MI plant will be idled for one week.
In recent times, auto giants such as General Motors Company (GM - Free Report) and Ford have been troubled by a high inventory of passenger cars. Consumers’ shifting pattern toward sports utility cars and pickup trucks can be attributed to this rise in inventory. For the first eight months of the year, passenger car sales of Ford declined 20%, whereas truck sales rose 2.4% and sales of sports utility vehicles increased 1%. According to Automotive news, as of Sep 1, Ford had 111 days' supply of Mustangs, 103 days’ supply of Transit vans, and 87 days’ worth of unsold Fusions. Ford is aiming at lowering the inventory to 65 to 70 days for most unsold models.
This halt in production will result in temporary layoffs of some workers. But the initiatives taken right now would better align the company for the future, including its employees. Moreover, though this temporary production halt will have some adverse effects on revenues, it could help the automaker avoid deeper price cuts of vehicles going forward.
Ford’s shares have gained 5.9% over the last three months, outperforming the 4.2% increase of the industry it belongs to.
Currently, both Ford and General Motors carry a Zacks Rank #3 (Hold).
Two better-ranked automobile stocks are Toyota Motor Corporation (TM - Free Report) and Daimler AG . Both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Toyota has an expected long-term growth rate of 7%.
Daimler has an expected long-term earnings growth rate of 2.8%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>