Shares of Ford Motor Company (NYSE:F) closed higher on Friday, after the company confirmed that it will begin reopening its factories in the U.S. and Canada on May 18.
Ford's shares ended the day at $5.24, up 7.6% from Thursday's closing price.
Ford's plan is to restart production in North America in several phases.
- Parts depots will reopen next Monday, May 11.
- On May 18, all but two of Ford's vehicle assembly plants in the region will reopen, but will run at less than full speed. Factories that had been operating on three shifts before the shutdown will reopen with two shifts; most two-shift factories will reopen with a single shift; most one-shift plants will continue to run on one full shift.
- The two exceptions, in Flat Rock, Michigan, and Oakville, Ontario, will resume production on May 25 with a single shift. Those plants make the Ford Mustang and Lincoln Continental (Flat Rock), and the Ford Edge and Nautilus SUVs (Oakville).
All of Ford's factories will operate under strict protocols to keep workers and visitors safe and (whenever possible) socially distanced. Among other changes, Ford will allow extra time between shifts to limit interactions between arriving and departing employees, and will require masks for anyone entering a Ford facility.
I expect that Ford (and GM, FCA, and other automakers) will be able to restart production with some routine snags, but no huge disruptions. That's great news for investors, as Ford (and most other automakers) record revenue when vehicles ship to dealers. Ford's revenue will rise sharply (and its cash-burn rate should fall) as its factories get back up to speed.
The bigger question is this: What will demand for new vehicles be like as America (and Canada and Mexico) reopen? Pickup trucks sold relatively well in April, but overall U.S. sales were down sharply. Will buyers return? Automakers and dealers (and auto investors) will all be watching closely.