After Ford Halves F-150 Lightning Manufacturing, Suppliers Really feel The Thunder

After Ford Halves F-150 Lightning Production, Suppliers Feel The Thunder

[ad_1]

These suppliers have invested tens of millions to satisfy anticipated manufacturing charges, solely to be left dissatisfied

December 18, 2023 at 17:31

 After Ford Halves F-150 Lightning Production, Suppliers Feel The Thunder

Ford is reportedly slowing manufacturing of the F-150 Lightning by roughly 50 p.c. Whereas this drastic cutback could assist the automaker align with demand extra successfully, it poses a big problem for its suppliers. Tier 2 and Tier 3 suppliers, particularly, might doubtlessly encounter extreme monetary difficulties consequently.

In line with a planning memo seen by Autonews, Ford reportedly informed its suppliers that it’s scaling again manufacturing of the F-150 Lightning to 1,600 models in early January 2024 due to “altering market demand.” That’s roughly half of its preliminary 3,200 unit objective for that month. In whole, it might imply that Ford will construct about 75,000 Lightning pickups subsequent 12 months.

That might nonetheless be an extreme quantity, contemplating that it has solely bought simply over 20,000 models via November of this 12 months. “Everyone’s eyes had been larger than their stomachs… This downturn we’ve skilled ought to have been anticipated by the business, however after they regarded on the early development, they figured it’d develop by [that much] every year. That was by no means going to occur,” mentioned Sam Fiorani, VP of worldwide car forecasting at AutoForecast Options, to Autonews.

commercial scroll to proceed

Learn: U.S. Supplier EV Inventories Have Doubled, No Surprise Automakers Are Scaling Again Manufacturing

 After Ford Halves F-150 Lightning Production, Suppliers Feel The Thunder


Simply to be clear about how a lot issues have modified, within the midst of this 12 months, Ford mentioned it anticipated to have a manufacturing charge of 150,000 models yearly by the top of 2023. Chopping that manufacturing objective by about half might find yourself that means massive points for suppliers. Massive Tier 1 suppliers are more likely to climate the storm however that may not be the case for smaller Tier 2 and Tier 3 outfits.

“Smaller suppliers… they’re not prepared for overcapacity of their vegetation. They should pay payments, pay employees and so they don’t have some huge cash backed up for any missed numbers,” mentioned Fiorani. After all, that’s assuming that these smaller suppliers relied on the preliminary targets that automakers predicted.

Shrewd corporations may need labored in contingency plans or various strategies to maintain modifications like this from affecting firm well being an excessive amount of. Notably, that they had some indication that this kind of factor could be coming. Ford scaled again manufacturing of the Mustang Mach-E earlier this 12 months and scaled-down plans for its new battery plant in Marshall, MI.

 After Ford Halves F-150 Lightning Production, Suppliers Feel The Thunder


[ad_2]

Supply hyperlink