It’s one of those blessings in disguise: Ford can’t build its cars fast enough. Ford CEO Alan Mulally says that keeping up with demand is putting a toll on its parts supply chain, but emphasizes that it’s just a short term problem.
“We’re going to increase production through the rest of the year,” said Mulally. “We have limits on our production as we’re going up, because as we restructure the entire business, we’re bringing along the entire supply chain, so we really can’t make as many vehicles as people want right now.”
Ford is adding shifts to its factories: a third shift at Michigan Assembly in Wayne, Ind., where the Focus is built; a third shift to its Chicago Assembly, where it builds the Ford Taurus, Lincoln MKS, and Explorer; a second shift in Kansas City for the F-150; and by September, a third shift in Louisville, where it builds the new Escape. Thirteen plants are cutting their summer shutdowns from two to one week, which will enable Ford to build 40,000 more cars.
Cars like the Focus, Fusion and Explorer are selling like mad: the Focus sold a high of 28,293 cars in March of this year, the highest for 2012 and a 40 percent increase over March of last year. Ford moved approximately 2,000 more Explorers this April than last year. And despite the frumpy Fusion getting a sleek new upgrade this year, Ford still managed to foist the same amount of Fusions upon unsuspecting Americans this year as it did this time last year.
But suppliers are reluctant to ramp up production: “The industry is so pared down; there was such a dramatic drop-off and suppliers are terrified of retooling,” said Rebecca Lindland, an analyst at IHS Automotive.
The theory is that they are scared to boost production after citing the bankruptcy and downfall of American car companies in 2009. But U.S. car sales have increased for all companies, from nearly 13 million last year to a projected 14.4 million this year, and May sales increasing by 30 percent.
If anything, Ford—and hometown rivals Chrysler and General Motors—are living proof of this. Likewise, Chrysler is eliminating its traditional summer shutdown completely to build more cars, while GM is making no changes to its schedule.
Source: Detroit News