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The 2020 Ford Explorer was supposed to drive earnings during the second half of 2019 but have, instead, become a drag on the automaker’s bottom line.

Two new products that were expected to put a halo around Ford Motor Co’s third-quarter earnings are, instead, set to drag the company down.

A series of problems at the automaker’s Chicago Assembly Plant have caused serious delays in ramping up production of the 2020 Ford Explorer and Lincoln Aviator, problems severe enough to force Ford to ship thousands of the two SUVs to another plant for costly and time-consuming rework.

As a result, Ford’s Q3 earnings now are expected to come in substantially below earlier expectations, creating more headaches for the company which already saw Moody’s cut its credit rating last month to junk bond status, raising still more concerns about the strategy put in place by CEO Jim Hackett.

(Ford Backs SUV Push With All-New 2020 Explorer)

Both Explorer and Aviator have received strongly favorable reviews from the automotive media, but sales of the Ford branded-SUV tumbled 48% last month compared to September 2018. Dealers around the country have indicated that demand is strong, but they simply can’t get enough of either Explorer or Aviator.

It’s not unusual for volumes to fall short during the first month or two after a key product undergoes a complete makeover, especially when a plant undergoes as extensive a tear-up as Chicago faced for the two SUVs. But months after Ford thought it had things under control, the problems at the Windy City plant have yet to be resolved, despite senior Ford officials saying that the situation is improving.

Ford invested $1 billion to upgrade its Chicago plant for the launch of the Explorer and Aviator models.

“We’ll be able to hit our stride with Explorer starting now,” Ford’s sales and marketing chief Mark LaNeve told the Bloomberg news service earlier this month.

But trade publication Automotive News reported that 2,500 more Explorers – the equivalent of about five days’ sales under optimum conditions – just arrived at the plant in Michigan that has been handling rework and repairs.

It’s unclear what is behind the problems in Chicago, but the plant has come under close scrutiny this past year, CEO Hackett having to personal step in to address reports of sexual harassment and other problems on the factory floor. The report by Automotive News referring to “roving groups of workers” who are still “creating a hostile environment” at the plant.

Those concerns, combined with other issues dogging the second-largest domestic automaker, have been spooking industry analysts and investors. While Ford stock is trading about 20% above its 52-week low of $7.41 a share, it has been tumbling this week in anticipation of a poor third-quarter earnings report, lagging in the low $9-a-share range as of midday Tuesday.

(Ford Adding Hybrid, High-Performance ST Models to Add to Explorer to Line-up)

What Ford will wind up delivering on Wednesday could move the market for its stock. Currently, a consensus of 15 analysts covering the company finds the consensus calling for Q3 earnings of 26 cents per share, down from 29 cents a year earlier.

But a 7.2% decline alone might not generate such a negative mood if there weren’t growing concerns about CEO Hackett’s leadership.

Joy Falotico, Lincoln president, introduced the new Lincoln Aviator at the 2018 Los Angeles Auto Show.

A month ago, when it downgraded Ford’s credit rating, Moody’s analyst Bruce Clark said in a statement that the move reflects “the considerable operating and market challenges facing Ford, and the weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan.”

This week, Ford was hit by other skeptics. ValuEngine already had given the company’s stock a “Sell” recommendation. It has downgraded that to a “Strong Sell.”

Morningstar analyst David Whiston is more upbeat, but nonetheless warned that the Explorer and Aviator shortfall will “be a big negative for the quarter (in) a viciously competitive market.”

The question is whether Ford finally is getting a grip on the problems in Chicago. The report of more cars going in for rework suggests the situation is yet to be resolved and that, in turn, all but certainly means Ford dealers will continue to face inventory shortfalls as they approach the end of the year. That would all but certainly bode poorly for Ford earnings for the fourth quarter, as well.

(Lincoln Takes Flight With New Aviator)

Ford has to hope that potential Explorer and Aviator buyers won’t go looking at what the competition has to offer – a very likely possibility considering the wave of new SUVs that have been coming to market of late.

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