Ford, GM, FCA, Mercedes and BMW production hit by U.S. parts plant fire

The fire took place last week at Meridian's plant in Eaton Rapids.

Photo credit: FOX 47 YouTube screen grab
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DETROIT -- Ford, General Motors, Fiat Chrysler, BMW and Mercedes-Beny faced production disruption at U.S. factories after an explosion and fire at a Michigan supplier factory led to a shortage crucial parts.

Ford said production of F-150 and Super Duty pickups at multiple U.S. factories will be halted this week.

Daimler's Mercedes-Benz halted SUV production at its only U.S. plant near Tuscaloosa, Alabama. The company has canceled shifts in certain areas and adjusted production hours for its employees, a Daimler spokesman said by phone Wednesday. He declined to quantify the anticipated lost vehicle output and related financial damage.

The Mercedes factory produces the GLE, GLS and GLE Coupe SUVs for global markets and the C-class sedan for sales in North America.

The parts plant affected is in Eaton Rapids, Michigan, owned by Meridian Magnesium Products of America. It supplies a crossbar beam that holds the dashboard in the Mercedes SUVs.

Ford on Monday idled F-150 production at its plant in Kansas City until May 14, temporarily laying off 3,600 workers. It will also suspend production at its Dearborn Truck Plant Wednesday night through at least the end of the week, affecting about 4,000 workers.

According to a letter shared with Dearborn Truck workers on Wednesday afternoon, officials expect the plant to resume production on Monday, May 14, although the letter cautioned that “this situation and circumstances can change." 

Ford Super Duty production has been halted at Kentucky, although that plant continues to produce other vehicles and no workers have been laid off. Super Duty output will continue at Ford’s plant in Avon Lake, Ohio.

Ford executives on Wednesday declined to say how long production will be suspended, although it could be knocked out for several weeks, a person familiar with the situation told Bloomberg.

The parts plant supplies three different components for Ford vehicles: a front bolster used in the F-150, Super Duty, Expedition and Navigator; a 3rd row seat cushion pan used in the Explorer, Flex and MKT; and a liftgate inner used in the MKT.

Production of the Explorer, Flex, MKT, Expedition and Navigator is not expected to be halted, Ford said.

Meridian company produces numerous lightweight parts, such as engine cradles, front-end carriers, instrument panel crossbar beams, liftgate inner structures and radiator supports. Ford said it relies on less than one-third of the parts output produced at the Meridian plant.

Ford said the disruption would have an "adverse impact" on its financial results that will be contained to the second quarter, but the company left its earnings guidance unchanged for the full year. Hinrichs declined to provide specifics on the second quarter impact.

The shutdowns could cost Ford as much as 15,000 trucks per week, according to James Albertine, an analyst with Consumer Edge Research.

F-series pickups generate most of Ford’s profits and Morgan Stanley recently estimated the value of the franchise as greater than that of the entire company. The truck line, including F-250 and other larger models, hauls in about $40 billion in annual revenue, exceeding the annual sales of companies such as Facebook and Nike. 

Other impacts

General Motors on Wednesday said it will temporarily halt production of Chevrolet Express and GMC Savana full size vans at its Wentzville Assembly plant in Missouri because of a parts shortage resulting from the fire. It said the plant will continue building the Chevy Colorado and GMC Canyon midsize pickups.

GM did not identify the specific part or how long van production will be idled.

Fiat Chrysler Automobiles said the fire has affected output of the Chrysler Pacifica minivan in Windsor, Ontario, adding it is "adjusting production schedules as needed to minimize plant downtime (and) will make up any lost production." The specific part was not indentified.

BMW of North America on Wednesday said production of the X6 and X5 crossovers has been interrupted in Spartanburg, South Carolina, because of the parts shortage stemming from the supplier fire.  

"BMW is working to develop alternative sources for the parts," the automaker said in an e-mailed statement to Automotive News. "The BMW plant in South Carolina has an inventory of parts on hand but until the supply chain stabilizes there will be some interruptions to X5 and X6 production. Production of the X3 and X4 models is not affected.”

The specific part supplied to BMW was not identified. 

Getting back online

The cause of the fire has not been determined.

Meridian, in a statement released Wednesday, said the local fire marshal has been able to access the plant and the investigation continues.  "We are currently following our safety protocols and working alongside state agencies and utilities to ensure that resumption of operations will be done in safe manner. Clean up and repairs are progressing," the statement said.

Meridian, in a previous statement, said it is working with its customers to move dies to its plants in Strathroy, Ontario, and the United Kingdom, Asher wrote, though the letter did not disclose the names of the customers.

Meridian is owned by Chinese supplier Wanfeng Auto Holding Group. It also provides parts to Toyota, Honda and Tesla among others, according to the websites of Meridian and Wanfeng.

Meridian makes aluminum and magnesium structural components at four plants in North America. Automakers use magnesium parts to cut weight in vehicles, and improve fuel economy.

Bloomberg, Reuters, Michael Martinez and Automotive News staff contributed to this report.

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