Ford Motor announced on Friday that it would boost its Bronco SUV and Ranger pickup production but reduce the output of its all-electric F-150 Lightning to align with customer demand and reflect the ongoing trend of lower-than-expected customer interest.
Balancing Growth and Profitability
Ford CEO Jim Farley stated the company's manufacturing flexibility to provide customers with options while balancing growth and profitability. He noted the popularity of the F-150 Lightning as America's best-selling EV pickup, expressing optimism about the future of electric vehicles, especially with the upcoming digitally advanced EVs and access to Tesla's charging network starting this quarter.
Reduced Demand for Electric Trucks
This announcement indicates the reduced demand for electric trucks. In October, General Motors delayed the opening of a $4 billion electric truck plant in Michigan by a year. In December, Ford informed suppliers that it intended to manufacture around 1,600 F-150 Lightning EV trucks per week, approximately half of the previously planned 3,200 units, starting in January. Last year, Ford sold 24,165 F-150 Lightning trucks in the United States, showing a 55% increase from 2022, out of a total of approximately 750,000 F-150s sold in the U.S. Ford shares were up 1% in mid-day Friday trading. In August, Ford announced that the F-150 Lightning plant could achieve an annual production rate of 150,000 vehicles by October after planning to double the production of electric truck vehicles in 2022.
Cutting F-150 Lightning Production
The reduction in F-150 Lightning production coincides with Detroit automakers' concerns about the Biden Administration's proposals to use emissions rules, potentially leading to 67% of all new vehicles in 2032 being electric vehicles (EVs). On Friday, the Environmental Protection Agency (EPA) submitted its proposal for finalizing vehicle requirements to the White House for review.
The automaker is reducing the Lightning production at its Rouge Electric Vehicle Center in Michigan from two shifts to one, affecting about 1,400 employees, effective April 1. Ford did not provide details on how this shift reduction would affect the output of the vehicles.
Ford stated that about half of the impacted employees will move to the Michigan Assembly Plant, responsible for producing the Bronco and Ranger. The remaining employees will either transfer to nearby plants or have the option to participate in a "Special Retirement Incentive Program" outlined in the 2023 Ford-United Auto Workers contract.
Boosting the Bronco and Ranger at Michigan Plant
Ford intends to add a third shift this summer, creating 900 new jobs to boost the Bronco and Ranger production at the Michigan Assembly Plant.
Sales of the F-150 Lightning increased by 55% last year, reaching over 24,000 pickups. Ford anticipates "further growth" in car sales in 2024 but is expected to be less than the 150,000 production rate considered when upgrading the plant last year, as vehicles are selling slower than before.
The sales of the Bronco and Ranger dropped by 9.7% and 43.3% last year, respectively, as the plant manufacturing these vehicles faced significant disruption due to a six-week UAW labor strike.
