Ford Says Parts Shortages Curtail Ranger Output in Asia

Ford Motor Co. (F), working to reverse losses in Asia, remains hamstrung by auto parts shortages that are limiting production of the Ranger small pickup.

Flooding in Thailand last year delayed the start of production of Ford’s Ranger factory there by two months, Joe Hinrichs, the automaker’s Asia chief, told reporters in Dearborn, Michigan, today. The Ranger plant still isn’t operating at full production because Thai suppliers are struggling to recover from the floods, he said.

“The supply base is still fragile and overwhelmed in Thailand,” Hinrichs said. “On any given day, someone will be a little bit short.”

The new Ranger, which isn’t sold in the U.S., is a key model for Ford as it attempts to become profitable in Asia this year. The loss of Ranger production was a “significant contributor” to the $178 million in pretax operating losses Ford reported in the Asia Pacific and Africa region from October through March, Hinrichs said.

“The Ranger is a very important product for us -- it is the Ford truck to the rest of the world,” Hinrichs said. “There are a number of markets that haven’t received their Rangers yet.”

Ford hasn’t started selling the Ranger yet in Indonesia, Vietnam and the Philippines, Hinrichs said. The automaker is having difficulty keeping up with demand in markets where the Ranger is on sale.

Unfilled Orders

“Last month, we had 11,000 orders in Thailand alone that we hadn’t filled yet,” Hinrichs said. “It’s a very important product to us and we need to make more.”

The flow of parts to Ford’s Ranger plant began to improve in late April and is now “close” to full production, he said. The situation remains unpredictable because all automakers in the region are ramping up production, which puts stress on suppliers, Hinrichs said.

“We’re still seeing what I’d call a fragile supply base across the industry,” Hinrichs said.

Last weekend, an explosion at a supplier plant near Bangkok killed 12 workers and halted production of a rubber compound used in car parts, Hinrichs said.

“It’s not a direct supplier to us, but it’s a material supplier that eventually makes a lot of automotive stuff,” said Hinrichs, who said he didn’t know the name of the supplier. “It’s a part of the world where there’s a lot of volatility.”

Ford doesn’t expect the factory explosion to affect Ranger production, Hinrichs said.

“It’s part of the life you lead over there that’s different than the more stable, mature markets,” Hinrichs said. “Every week, there’s always something you have to deal with.”

Ford, based in Dearborn, slid 0.5 percent to $10.61 at the close in New York. The shares have fallen 1.4 percent this year.

To contact the reporter on this story: Keith Naughton in Dearborn, Michigan at knaughton3@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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