In the third quarter, Ford F-150 Lightning sales dropped by 46%.
On Monday, Ford Motor Company confirmed it is temporarily cutting a shift at its Rouge Electric Vehicle Center. The news comes as the United Auto Workers (UAW) continues to strike against the Big Three automakers, though Ford contends the 700-or-so layoffs of employees building the F-150 Lightning are entirely unrelated to the labor actions.
Rather, the company says the cut is down to “multiple constraints, including the supply chain and working through processing and delivering vehicles held for quality checks after restarting production in August.” The automaker closed its plant earlier in the summer to boost its manufacturing capacity, though recent sales suggest the market may be cooling off to the brand’s first fully electric truck.
According to a Wall Street Journal piece, an UAW official wrote a memo laying out why they believe Ford cut a production shift right now. “It doesn’t take a rocket scientist to figure out that our sales for the Lightning have tanked,” that official reportedly said in the memo obtained by WSJ.
There is some public evidence to support lack of sales as a driving force for the layoffs. In the third quarter of 2023, the F-150 Lightning sold just 3,503 examples nationwide — a 45.8% slide from the same period last year. It’s worth noting, though, that the Lightning’s sales are still up 40% year-to-date through September 30. The Q3 drop-off could be cooling demand, Ford’s contention about constraints related to the summer plant shutdown, or both. We’ll have to wait for Q4 figures to emerge in January 2024 to see if Ford’s electric truck really won’t find as many buyers in the long-term.
Ford recently introduced large price cuts for 2023 model F-150 Lightnings, after hiking up MSRPs by $20,000 earlier in the year. It’s since walked back base Lightning Pro prices to $49,995 (before destination), and even dropped 2024 pricing on the higher-end Platinum trim, as well as introducing a new mid-range Flash model to broaden the truck’s appeal.
What effect will the strike and shifting demand have moving forward?
Whether Ford contends the Rouge layoffs are down to the UAW strike, the automaker has laid off more than 2,500 employees since UAW members joined the picket line on September 14. The latest round comes from the Blue Oval’s Kentucky Truck Plant, from which the company announced an additional 500 layoffs Monday, across five component plants. Those facilities supply the Louisville, Kentucky assembly plant, which is Ford’s largest manufacturing center and generates $25 billion in annual revenue for the company. Executives warned last week it could lay off 4,600 workers at nine facilities due to lost production at the Kentucky Truck Plant.
Knock-on effects of the UAW strike are inevitable and already taking place, as automakers contend these ongoing layoffs boil down to employees not having any work to do with certain facilities now offline.
Shift cuts like the one at the Rouge plant and a potential shift in Ford’s truck strategy moving forward could put the F-150 Lightning in a different position than the company had pitched it at its launch. Rather than full EVs imminently replacing internal combustion in the next few years, we may actually see automakers ramp up ICE and hybrid production to offset lost revenue opportunities and boost sales volumes, especially as resources continue to shift around in light of the strike and consumer demand builds toward more affordable ICE vehicles.
Speaking to Yahoo Finance, CFRA Research analyst Garrett Nelson said, “We think Ford’s announcement is emblematic of the difficulties traditional automakers have faced with ramping up EV production, but also reflects consumer demand for EVs that wasn’t what it once appeared to be in terms of the robust reservation counts for certain new models.”
Again, end-of-year sales figures will offer more insight into demand trends, and we may get a clearer picture of today’s announcement and the plan moving forward when Ford reports its quarterly earnings to investors after the markets close on Thursday, October 26.