Ford halts F-150 production

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A fire at a small auto parts-maker's plant is cutting off supply of key components and disrupting production of crucial Ford Motor Co. and Daimler AG models.

The fire was at one their suppliers, Meridian Magnesium Products, in Eaton Rapids.

The move follows a fire at a MI plant producing critical components for the truck.

One Monday the company idled F-150 production at its plant in Kansas City, Missouri until May 14th, temporarily laying off 3,600 workers of the plant. But the Super Duty will continue to be made at Ford's OH assembly plant in Avon Lake.

"We are working closely with the supplier to manage the situation", a spokesperson for Ford explained to CNBC. "We're confident that any impacts will be short term".

The F-Series pickups have always been the top-selling vehicles in the USA - and for Ford, they're a license to print money. It's the best selling vehicle in the country, and now that Ford is in the middle of an $11 billion cost-cutting initiative, shutting down the F-150 plants a devastating blow.

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Hinrichs added that the F-150 inventories are plentiful enough to not have any impact on current customer demands. But the layoffs are likely to spread rapidly as Ford will nearly certainly trim production of engines, body panels and other parts and components in the F-150, while its suppliers will also cut production until the pickup lines begin rolling again.

While a complete halt in production isn't a definite, signs are certainly pointing that way.

That's because there was a fire at a supplier's plant last week.

It is unclear how soon Meridian will be able to restart production and whether Ford and the other manufacturers will be able to find alternative sources.

"The blaze at Meridian Magnesium, the city's largest employer, forced the evacuation of almost 150 people from the building, but one city official said it was "a miracle" that only two people were injured", the State Journal reported. Super Duty production at Ford's Avon Lake, Ohio plant has not been impacted thus far. Ford declined to say how long the shutdown will last, but did not change earning forecasts and will be isolated to the second quarter.

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