Ford said today that its third-quarter earnings fell nearly 55% and downtime is slated at five North American plants to reduce inventory levels, including the Kansas City Assembly Plant, which builds the profitable F-150 pickup, according to the Detroit News.
The News reported that the North America profit decline is related to a door latch recall, Ford’s launch of a new aluminum-bodied Super Duty and “normalization” of sales mix on the F-150 the third quarter of 2015 when it was building stock as it came out of a launch and most sales were to retail customers. Ford said it reduced dealer inventory of the F-150, Super Duty and cars.
The biggest drop was in North America, where pre-tax profit fell nearly 57 percent to $1.26 billion, down from a record $2.9 billion earned a year ago. And that decline “is really what’s driving the company change,” Ford Chief Financial Officer Bob Shanks said.
North America profit margin fell to 5.8 percent from 12.3 percent a year ago and to its lowest level since the fourth quarter of 2011. Wholesale volume fell 11 percent and North America revenue dropped $1.9 billion to $21.8 billion.
“This year we have a stock decline as we’re adjusting our production to demand,” he said. “We also have normal levels of fleet vs. retail sales.”
The full story is available here.