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Exclusive: Ford to build current and new F-150 pickups at same time

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(Globalpost/GlobalPost)

By Deepa Seetharaman

DETROIT (Reuters) - Ford Motor Co will produce both its current F-150 pickup and a new model for about six months to avoid disrupting sales of the top-selling U.S. vehicle and safeguard against potential kinks tied to the truck's extensive overhaul, people familiar with the plans said.

The second-largest U.S. automaker aims to start production of the new truck around July 2014, sources said. Ford will continue to build the older model for the first six months of the new F-150's launch.

The automaker took more time to prepare its factories to build newer truck models in 2003 and 2008, according to Barclays Capital analyst Brian Johnson. Ford was able to revamp its plants at a more "leisurely" place in 2008, when high fuel prices sapped demand for larger, gas-guzzling models.

But planning for the upcoming F-150 comes as U.S. demand for trucks is quickly growing, stoked by strength in the housing and oil industries. Ford cannot afford any disruption to production at a time when U.S. sales of full-size pickups are increasing at almost three times the pace of the overall industry.

"In order to ramp up, you have to retool...and that means you have to take capacity offline," IHS Automotive analyst Mike Jackson said. "To do that, at a period of time when demand is so strong, makes it a bit challenging."

Ford, which reports second-quarter earnings on Wednesday, declined to comment. The F-series trucks and SUV derivatives such as the Expedition account for more than 90 percent of Ford's global profit, according to Morgan Stanley.

Ford builds the F-150 in Kansas City, Missouri and Dearborn, Michigan. The Dearborn truck factory was partially shut down during the last week of June to allow for some "facility work" for the new F-150, according to a May plant newsletter.

At the Detroit auto show this year, Ford showed a truck concept dubbed the Atlas that hinted at a bolder, lighter design. Sources have previously said Ford is looking to cut at least 700 pounds from its F-150 truck.

Ford's overhaul of the F-150 includes relying on more aluminum and lightweight materials to meet future fuel economy standards. Ford already uses aluminum in the hood of its current F-150, but the new truck will use it more extensively.

Aluminum is about one-third the weight of conventional steel, but different factory equipment is required to manipulate the material.

"You wouldn't want to do both plants simultaneously because if there is a glitch, you don't want that cutting off supply of all trucks," Johnson said.

It is unusual, but not unprecedented, for automakers to build older models alongside the new ones, especially when it comes to top-sellers.

Ford is allocating more time than General Motors Co to change over to the new model, Johnson said. GM built the old and new versions of the Chevrolet Silverado and GMC Sierra pickups for about two months this year, a GM spokeswoman said.

(Additional reporting by Ben Klayman and Paul Lienert; Editing by Martin Howell and Leslie Gevirtz)

http://www.globalpost.com/dispatch/news/thomson-reuters/130723/ford-develop-hybrid-trucks-solo-after-toyota-tie-ends