Ford Motor Co. (F - Analyst Report) started producing its new plug-in hybrid C-Max Energi at its retooled Michigan assembly plant that is capable of manufacturing vehicles based on multiple platforms. The automaker overhauled the 55-year-old plant in 2009 by spending $550 million that used to roll out Expedition and Lincoln Navigator full-size SUVs.
According to Ford, the Michigan plant is the only existing plant in the world that produces gas-powered, hybrid, plug-in hybrid and electric cars all on the same production line due to its advanced retooling and trained workers capable of producing a wider range of models. Currently, the plant can produce five body styles on two platforms, including gas-powered versions of the Ford Focus compact car.
Unlike its peers, Ford has undertaken “One Manufacturing” strategy, which aims at producing multiple models from plants across the world in order to save production costs and fast adaptation to changes in consumer tastes. In contrast, Ford’s cross town rival General Motors Company (GM - Analyst Report) and Japan’s Nissan Motor Co. (NSANY - Snapshot Report) produce their Chevrolet Volt and Nissan Leaf, respectively, at plants having standalone platforms.
According to Jim Tetreault – head of manufacturing in North America, this flexible manufacturing style becomes possible, especially at plants that produce cars, sedans and crossovers and not trucks, which have different designing requirements. Ford anticipates producing 4.5 models at each of its plants by 2015, up from 3.6 models currently.
Apart from Michigan, Ford’s plant in Oakville, Ontario can deliver three body styles on two platforms and in Louisville, Kentucky, six styles on three platforms. The company now intends to make its other plants capable of producing vehicles based on multiple platforms; however, doing so, the company might face challenges in modifying fuel economy and safety requirements.
Ford, a Zacks #3 Rank (Hold) company, posted a 17.6% rise in earnings per share to 40 cents in the third quarter of the year from 34 cents a year ago, driven by impressive results in its North American operation and, to some extent, its Asian operation. With this, the company has also beaten the Zacks Consensus Estimate by 10 cents per share. Total profit rose 15.6% to $1.6 billion from $1.4 billion a year ago.
However, total revenue in the quarter slid 3.0% to $32.1 billion due to lower revenues in South America, Europe and Financial Services operations that offset the marginal improvement in revenues in North America and Asia. However, revenues were higher than the Zacks Consensus Estimate of $31.0 billion for the quarter.