Over the weekend we recapped some of the less than impressive moments in the recent US car industry history, which suddenly appears to be bombarded with a barrage of bad news: starting with Ford’s (F) disastrous August sales when the company admitted “sales have reached a plateau”, continuing to the surge in delinquent subprime auto borrowers hitting nearly a 7 year high as the marginal creditworthy car buyers disappears, then noting the record $4,000 in industry-wide new car incentives in September as preventing a plunge in last month’s auto sales, and recalling last week’s downgrade of the US auto sector by Goldman which said that the US “cycle has peaked”…
…one would almost think that a respite from the bad news was in order. One would be wrong.
As a result of slowing demand and declining US auto sales coupled with growing inventory, Ford Motor is halting one of two plants that builds its top-selling F-150 pickup as it idles four factories this month amid slowing U.S. auto sales.
As Bloomberg reports, starting this week, Ford is shutting its Louisville, Kentucky, factory building the Escape and Lincoln MKC sport utility vehicles, as well as two plants in Mexico that make the Fusion sedan and Fiesta subcompact, according to an e-mailed statement. Next week, the second-largest U.S. automaker will close the F-150 factory near Kansas City for seven days. And starting Oct. 31, the Louisville plant will be idled for another week.
The plant closings follow last week’s shutdown of Ford’s Mustang factory in Michigan after sales of the sports car plunged 32% in September.
Contrary to the popular refrain of a strong economy, US auto sales are slowing as many analysts predict the industry won’t match last year’s record of 17.5 million cars and light trucks. As we reported recently, Ford CEO Mark Fields has said the U.S. auto market has plateaued and that showroom sales are weakening. “We said we expected the overall retail industry to decline in the second half of the year,” Kelli Felker, a Ford spokeswoman, said in the statement. “We also said to expect to see some production adjustments in the second half — this is one of them.”
