Weak Auto Sales Lead to New Ford Layoffs

Maker temporarily idles 130 workers at Ohio F-Series plant.

by on May.05, 2017

A Ford F-450 Super Duty pickup.

Ford Motor Co. will temporarily drop a shift at a pickup plant in Ohio due to slowing sales, a move that will idle 130 hourly workers.

The move comes at a time when U.S. motor vehicle sales have begun to slow after seven years of growth – and three consecutive annual sales records. Ford has been particularly hard hit by the slowdown in recent months.

The Last Word!

Automakers have become increasingly worried about a broader slowdown of the U.S. economy, especially in sectors that might impact sales of commercial trucks, such as the medium-duty pickups assembled at the Avon Lake, Ohio facility hit by the Ford cutback.

(New vehicle sales tumble in April. Find out why, Click Here.)

Automakers, in general are planning longer summer shutdowns than had been the case in recent years, as sales of new vehicles in the American market surged to a record 17.5 million vehicles in 2016. But the cutbacks are nowhere near as severe as what the industry ordered a decade ago, as it approached the worst downturn since the Great Depression.

Workers at the Avon Lake plant.

Just how far down sales may go this year is far from certain. Consulting firm IHS Automotive has been predicting overall demand will dip to 17.4 million vehicles for all of 2017, a modest 0.6% decline from the 2016 record. Other researchers have forecast slightly larger reductions but still put their numbers above the 17 million mark.

But sales tumbled 4.7% in April, significantly greater than the consensus industry forecast, and the fourth monthly decline in a row, leading several researchers ed by TheDetroitBureau.com to say they may have to revise their full-year forecasts downward if the market doesn’t show a rebound in the coming months.

One big concern is what will happen in the traditionally high-profit light truck segment that has been driving much of the industry recovery since the end of the Great Recession. There’s been notable weakness in commercial sectors, and the planned Ford cutback in Ohio comes at a factory that assembles the maker’s big F-650 and F-750 pickups and truck chasses. They are used for such vehicles as shuttle buses, heavy-duty tow trucks and construction vehicles.

The trucks produced at Avon Lake were long assembled in Mexico but moved back to the U.S. in 2015. The plant found itself in the spotlight during the recent presidential campaign when then-candidate Donald Trump criticized Ford for its Mexican production operations. Ford countered by noting it was shifting slow-selling passenger cars to facilities south of the border, while bringing high-demand trucks to the U.S.

A slowdown by the auto industry could come to haunt the new president as it is one of the country’s largest source of manufacturing jobs, and a potential source of the jobs Trump has promised to bring back to the U.S.

(Trump open to hiking gas tax to fund infrastructure plan. For more, Click Here.)

Automakers may have to "lift off the accelerator," warns Toyota CEO Jim Lentz.

During an appearance in Ann Arbor, Michigan to help dedicate the company’s expanded technical center, Toyota North America CEO Jim Lentz warned that automakers may have to “lift off the accelerator” if sales continue to slow, after boosting production for the last seven years.

But Lentz also said he was hopeful the White House would follow up with the large infrastructure program the new president has called for, suggesting that “If you get a $1 trillion stimulus, that could add 800,000 units,” to U.S. motor vehicle sales.

A stimulus package aimed at infrastructure work, such as highway construction, would put particular emphasis on medium and heavy-duty trucks, just like those being built at Ford’s Avon Lake plant, according to industry observers.

(Will Trump kick-start the auto industry? Click Here for the story.)

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2 Responses to “Weak Auto Sales Lead to New Ford Layoffs”

  1. Fred says:

    The most surprising thing should be that 130 people comprise an entire shift! Not as human worker-free as GM’s Sonic and Bolt plant, but clearly shows where the industry is headed.

  2. Gene says:

    [quote]Ford Motor Co. will temporarily drop a shift at a pickup plant in Ohio due to slowing sales, a move that will idle 130 hourly workers.[/quote]
    The plant under discussion builds the big Ford F-650/F-750 trucks, not “pickup” trucks. These are the biggest trucks Ford offers, and are destined to be dump trucks, moving vans, beverage delivery, lumber trucks, semi tractors and other vocational vehicles.
    Pickup trucks are loosely grouped under class 1 through 4, and called “Light Duty;” these trucks built at Avon Lake are classified as “Medium-Duty” in industry parlance, a group of “Class 6 and 7″ vehicles. “Heavy Duty” trucks like most big Peterbilts and Kenworths, are Class 8.