Ford Trims Production at Five Plants in North America as U.S. Sales Slow -- Update

By Christina Rogers Features Dow Jones Newswires

Ford Motor Co. said Tuesday it will temporarily idle production lines at five North American plants, including three in the U.S., the latest in a series of moves by U.S. auto makers to cope with slowing vehicle sales and rising industry capacity.

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Ford is scheduling one to three weeks of downtime at the factories to whittle down unsold-car inventory on dealer lots. Collectively, these five factories employ tens of thousands of workers, who will be put on temporarily layoff during the down weeks.

The move will affect plants that mostly build Ford passenger cars, including the subcompact Fiesta and bread-and-butter Fusion sedan, whose sales have been hit hard by the shift in consumer demand to larger crossovers and SUVs.

Ford is also taking down a line at its Kansas City Assembly plant, where it builds the Transit van, to fix a recall disclosed in June.

Ford executives have signaled throughout the year it might take such actions to counter slowing U.S. sales. While it has largely resisted permanent layoffs, opting instead to schedule downtime when needed, the company's inventory levels on dealer lots have crept up in recent months.

General Motors Co., meanwhile, has cut thousands of jobs this year at several passenger-car plants in the U.S. in response to slumping consumer demand.

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--Chester Dawson contributed to this article.

Write to Christina Rogers at christina.rogers@wsj.com

DETROIT -- Ford Motor Co. said Tuesday it will temporarily idle production lines at five North American plants, including three in the U.S., the latest in a series of moves by U.S. auto makers to cope with slowing vehicle sales and rising industry capacity.

Ford says it is scheduling downtime at the factories to whittle down unsold-car inventory on dealer lots. Collectively, these five assembly plants, two of which are in Mexico, employ tens of thousands of workers, who will be put on temporarily layoff during the down weeks. The production hiatus ranges from one to three weeks, depending on the factory.

The move mostly affects factories building Ford's passenger cars, including the subcompact Fiesta and bread-and-butter Fusion sedan, whose sales have been hit hard by the shift in consumer demand to larger crossovers and SUVs.

Ford is also taking down a line at its Kansas City Assembly plant, where it builds the Transit van, to fix a recall disclosed in June.

Ford executives have signaled throughout the year production cuts may be needed to counter slowing U.S. sales. While it has largely resisted permanent layoffs, opting instead to schedule downtime when needed, the company's inventory levels have crept up in recent months.

General Motors Co., meanwhile, has cut thousands of jobs this year at several passenger-car plants in the U.S. in response to a pullback in consumer demand for small cars and family sedans.

"We are continuing to match production with consumer demand, as we always do," Ford said in a statement.

Ford has made other cuts this year, temporarily laying off 130 workers at its assembly plant in Avon Lake, Ohio. At the time, the company said the layoffs were expected to last until a newer version of its heavy-duty commercial trucks launched in September.

The cutback is the latest sign that U.S.-based auto makers are struggling to keep supplies in check as U.S. auto sales continue to weaken this year, following seven years of uninterrupted growth.

Last month, U.S. light-vehicle sales fell 1.9% from a year earlier, according to Autodata Corp., and the industry's annualized selling pace, a measure of how sales are tracking for the full year, came in at a lower-than-expected 16.14 million vehicles in August.

The Japanese auto makers, however, have been more bullish on the U.S. market.

Honda Motor Co. on Monday announced it was adding 300 workers to its Ohio assembly plant, anticipating strong demand for a redesigned Accord going on sale this fall. Toyota Motor Corp. has also expanded its workforce in Kentucky, hiring 900 workers there earlier this year, forecasting strong sales of its Camry family sedan.

Ford's sales fell 2.1% on the year in August to 209,029 vehicles, as demand for SUVs cooled. But it posted a 15% surge in sales of pickup trucks, its biggest profit generator.

Detroit's Big Three auto makers, which used to be known for sacrificing profit margins to keep factories running, have in more recent years vowed to keep output in line with demand for their vehicles.

Fiat Chrysler Automobiles NV said last week it would shut down an assembly plant in Windsor, Ontario, for five weeks starting next month, citing a need to "balance production" of two minivans it makes. One needs to be re-equipped to meet safety regulations.

In June, General Motors said it would extend its typical summer shutdown at certain U.S. factories and has laid off thousands of workers this year related to slow passenger car sales.

--Chester Dawson contributed to this article.

Write to Christina Rogers at christina.rogers@wsj.com

(END) Dow Jones Newswires

September 19, 2017 17:23 ET (21:23 GMT)