Ford Motor Company (F - Free Report) has temporarily suspended vehicle and engine production at its International Markets Group (IMG) manufacturing sites in India, Vietnam, Thailand and South Africa, to contain the spread of coronavirus. The suspension which began on Mar 21 is expected to continue for several weeks depending on the pandemic situation, national restrictions, supplier constraints and dealer-stock requirements.
The firm is changing its original IMG production schedule and temporarily suspending market-by-market production, along with monitoring the situation continuously.
In India, the last working day at the Chennai Vehicle Assembly Plant, Sanand Vehicle Assembly Plant, Sanand Engine Plant and Chennai Engine Plant was Mar 21. In Vietnam, the last working day at the Ford Vietnam Limited Haiduong Assembly Plant is scheduled for Mar 26. Further, in Thailand and South Africa, the last working day will be Mar 27 at the Ford Motor Company (Thailand) Limited and, Silverton Assembly Plant (Pretoria) and Struandale Engine Plant (Port Elizabeth), respectively.
The latest measures are in sync with the company’s previously-announced actions, including the temporary suspension of vehicle and engine productions in North America, Europe and South America.
Moreover, the company has changed its manufacturing processes and cut production levels in the plants, in line with the nation-wide campaign addressing the crisis. It has implemented more stringent cleaning regimens, imposed restrictions on access to the plants and taken other steps to make workplaces safe. Other measures to contain the spread of the virus include allowing some employees to work from home and social distancing.
Meanwhile, Ford recently suspended its 15 cents per share quarterly dividend and withdrew the 2020 guidance to preserve cash as vehicle sales fade on the coronavirus outbreak. The company is also planning to draw $15.4 billion from two credit linesto deal with the downturn caused by shutdowns in production due to the pandemic-led crisis. It will borrow $13.4 billion under its corporate credit facility and an additional $2 billion under the supplemental credit facility.
Ford currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The rapidly-spreading coronavirus pandemic has become a concern for other global auto biggies as well including Tesla (TSLA - Free Report) , Honda Motor (HMC - Free Report) , Toyota Motor (TM - Free Report) , Volkswagen AG, Goodyear Tire, Nissan, Harley-Davidson and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nation-wide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the supply-chain balance globally.
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