NEWS: 2015 Ford F-150 Launch May Hurt Ford Profits

January 29, 2014
2015 Ford F 150 Front Side View In Snow
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Buried in a document meant for investors and analysts, Ford revealed yesterday that launching the all-new 2015 F-150 pickup truck may hurt the automaker's profits. The company plans to idle factories for longer to accommodate the switch from the current truck to the 2015 Ford F-150, which could hurt overall sales for the year.
In its statement, Ford warned that the automaker's North American full-year 2014 profit would likely be lower than the impressive $8.6 billion it reported for 2013. Ford expects to report an operating margin of 8 or 9 percent this year. In 2013 Ford's North American operations posted a 9.9-percent margin, down from a 10.4-percent margin in 2012.
2015 Ford F 150 Front Side View In Motion
According to Automotive News, Ford CFO Bob Shanks told reporters yesterday that the projected profit dip is, "largely attributable to F series." Ford says that it will be forced to idle its Dearborn Truck Plant in Michigan for 11 weeks on top of the usual summer shutdown, and to idle the Kansas City, Missouri, plant that builds the F-150 for two weeks beyond the summer shutdown, to switch to 2015 Ford F-150 production. As a result, Ford will have fewer trucks to sell and expects, "lower wholesale [sales] volume than in 2013."
On top of that, Ford warns that, "higher manufacturing, engineering and spending-related costs," for new product launches will cut into its profitability. The switch to using aluminum for the bodywork of the 2015 Ford F-150 will account for a large portion of that additional cost.
Ford, meanwhile, has publicly downplayed any concerns over the new truck's launch. "Our team is very confident in this launch," executive chairman Bill Ford Jr. told us at the introduction of the 2015 Ford F-150. "We know aluminum well."

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