11-Week Downtime at Ford Michigan Plant - Analyst Blog

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Ford Motor Co. ( F ) announced the temporary closure of a factory in Dearborn, Michigan. The plant manufactures F-150 trucks and will remain shut for 11 weeks. The automaker intends to make alterations in the plant to produce F-150 trucks using aluminum instead of steel.

Another Ford factory based in Claycomo, Mo. manufactures F-150 trucks and will be closed for two weeks in 2014 for the upgrade. It will again be shut in 2015 for further renovations.

Moreover, Ford will be providing discounts on the remaining 2014 F-150 in order to clear dealer stock. Owing to the plant closure and discounts on the remaining vehicles Ford expects pre-tax profit, excluding special items, in a range of $7 billion to $8 billion in 2014. However, Ford has increased the production of F-series vehicles to create ample inventory level before the plant closure.

Ford recently launched the aluminum version of Ford F-150, which is believed to possess improved power, capability, efficiency and durability. It will hit the market in the latter part of this year and will offer five primary trims, including XL, XLT, Lariat, Platinum and King Ranch.

The new Ford F-150 has been launched under the One Ford plan, which focuses on producing vehicles that ensure quality, fuel efficiency, safety, smart design and value to customers.

The new F-150 truck is manufactured using high-strength aluminum alloys which reduce the vehicle's weight by 700 pounds. The light weight results in improved speed and fuel efficiency. Aluminum alloys are fast replacing steel, the widely used metal in the auto industry.

Not only Ford, General Motors Company ( GM ) also closed three factories producing pickup trucks for five, seven and nine weeks, respectively, as per Motor Trend magazine. The shutdown was made for renovations required to produce the redesigned 2014 Chevrolet Silverado and GMC Sierra.

Ford currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked automobile stocks worth considering are Tesla Motors, Inc. ( TSLA ) and Dongfeng Motor Group Company Ltd ( DNFGY ).  Tesla carries a Zacks Rank #1 (Strong Buy) while Dongfeng Motor is a Zacks Rank #2 (Buy) stock.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: DNFGY , F , GM , TSLA

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