Ford's F-Series Is Creating Jobs in America
Ford's F-Series truck has been America's best-selling truck for 36 straight years and isn't looking back at the competition anytime soon. With the average age of trucks hitting 13 years, and with the gradual U.S. housing industry rebound causing demand for full-size trucks to surge, it's no surprise that Ford is benefiting in sales and profits.
And that's not all: Ford is also creating jobs for American workers. Let's take a look at the jobs outlook, and also Ford's market share, profits, and plant capacity.
The F-Series' long history of success looks to be a trend that will continue. Last month, F-Series sales were up 24% versus the prior year, and for the year they're up 19%. The full-size-truck segment is the fastest growing this year and has expanded three times faster than the industry average. Ford's plant in Kansas City, Mo., will add more than 2,000 jobs to support the high demand for the F-Series, and more than half of those jobs will be entirely new hires.
This is part of a continuing trend for Ford. The automaker has pledged to create at least 12,000 jobs in the U.S. by 2015 - a goal it's already reached 75% of.
Investors also have reason to cheer this development. In the third quarter, Ford will be adding 900 jobs for a third-shift crew to help assemble the F-Series. That's a great development, because the third-shift crew will lower overhead and allow every single F-Series truck to roll off the line more profitable than the one before it.
Ford is running multiple plants at or near capacity, which will strengthen its margins in North America. The company's operating margin is already 11% -- a very strong number that tops its rival General Motors , whose U.S. margin comes in at a modest 6.2%. It's possible we could see Ford's margin increase even more at the end of the year if plant capacity remains high and third-shift crews are used more.
The F-Series trucks offer an awesome combination of power, fuel economy, and capability. As Polk data recently noted, Ford has the most trucks still on the road with more than 250,000 miles on them. That's "built Ford tough" to be sure, but how tough will the competition be as it picks up significantly over the next year?
General Motors isn't sitting idly by. Ford's crosstown rival is launching its redesigned Chevy Silverado and GMC Sierra this summer. Already this year, GM's best-selling truck is up 28% versus last year and is up 23.5% year to date, in part because GM is dishing out some cash incentives to make sure its 2013 models are moving to make way for the new release models.
And there's more coming next year, as GM is relaunching two midsize trucks in a market that Ford walked away from. The Canyon and Colorado -- which might be renamed -- are going to be timed to launch at the same time Ford's F-150 hits the market. Those will be aimed at taking away consumers who may not need a full-size F-150 and can no longer purchase the recently discontinued Ford Ranger.
It will be vital for investors to watch sales and market share when GM's 2014 models are launched this summer. Ford won't release its next-generation F-150 until next year, and GM is going to try and take advantage of every second. GM is also being aggressive with pricing and won't increase the price of the redesigned model, as it tries to persuade consumers who are on the fence to buy now.
These trucks bring in majority of profits for both Ford and GM, so it's the most important segment for investors to watch in terms of market share and sales. Ford made a gamble when it pulled out of the midsize market, and if that proves to be a mistake, it will have to act quickly to minimize damage, or else it could suffer lost sales and profits.
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The article Ford's F-Series Is Creating Jobs in America originally appeared on Fool.com.Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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