Fire at Chinese-owned factory halts production of Ford truck

A fire at a Chinese-owned auto supplier in Michigan has temporarily halted production of the best-selling vehicle in the US.

Ford Motor Co on Wednesday suspended production of the company's F-150 pickup, the nation's best-selling vehicle for more than 35 years, because of a fire earlier this month at a parts factory in Eaton Rapids, Michigan. Ford sold nearly 900,000 F-series trucks in 2017.

The May 2 explosion and fire occurred at Meridian Magnesium Products, a supplier of magnesium die-cast components. The company is a unit of China's Wanfeng Auto Holdings Group Co Ltd.

The fire and explosion damaged the plant's roof. The facility employs about 400 in Eaton Rapids, which is located about 20 miles south of Lansing, the Michigan capital. The Lansing State Journal reported that portions of the Meridian plant remain open.

According to Abhay Vadhavkar of the Center for Automotive Research in Ann Arbor, Michigan, Meridian produces the radiator support also known as the front bolster for the F-150 trucks.

"These are large pressure-cast magnesium parts which are then machined to tight tolerances. The Super Duty (F-250 to F-550) trucks as well as the Ford Expedition and Lincoln Navigator (sport-utility vehicles) receive radiator supports from this plant," he wrote in an email.

Meridian is the top North American supplier for the magnesium radiator support structure, the Detroit Free Press reported. Fiat Chrysler Automobiles NV, General Motors Co, BMW and Mercedes-Benz also have halted or adjusted production on certain vehicles in North America due to the fire.

In a statement Wednesday, Ford expects the downtime to affect its second-quarter profit but maintained its full-year earnings guidance.

David Whiston, industry analyst for Morningstar Inc, said that "the magnitude of the impact (for Ford) is dependent on how many days the shutdown lasts, but even a five-day shutdown is a few hundred million dollars of pretax profit lost by my estimate".

Whiston said for now the F-Series is being affected. "But if this issue halts Expedition and Navigator production, then things get even more ugly. Those SUVs and the F-Series are Ford's most profitable vehicles, so Ford can't have a long shutdown of any of them without major negative ramifications to earnings," he said.

Ford said it is working with its suppliers to offset the impact of the fire. Vadhavkar said Meridian has another facility in Canada that "could resume supply of these parts quickly. If they were stamped and welded, another supplier could be able to produce them within a week or so. However, for cast magnesium parts such as these, it is unlikely that another supplier would be able to produce these parts on short notice," he said.

paulwelitzkin@chinadailyusa.com