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Ford Boosts Second-Half Output By 26 Percent on Sales

Aug. 13 Ford Motor Co., benefiting from the Obama administration’s “cash-for-clunkers” program, said it’s boosting factory output by 26 percent in the second half to meet the increased demand.

Ford, the only major U.S. automaker to avoid bankruptcy, is increasing production by 18 percent in the third quarter to 495,000 cars and trucks. The Dearborn, Michigan-based automaker plans to raise plant output by 33 percent in the fourth quarter.

The Ford Focus small car and the Escape small sport-utility vehicle are among the top 10 sellers in the federal program that gives consumers as much as $4,500 to trade in an older car for a fuel-efficient auto. Other leading sellers, such as the Fusion sedan, helped Ford post its first monthly sales increase in July since 2007 as auto demand picks up across the industry.

“People who would have liked to have traded in their larger SUVs have been held hostage by their lower resale values and concerns about the economy,” Ford sales analyst George Pipas said in an interview yesterday. “Cash for clunkers released that demand and allowed them to do what they’d wanted to do.”

To increase Escape production, Ford said it is bringing workers back from scheduled shutdown at its Kansas City, Missouri, factory to work Aug. 21-22. To boost Focus output, Ford said it is scheduling overtime and adding Saturday shifts at its plant in Wayne, Michigan.

Ford boosted production by 16 percent to 445,000 vehicles in the three months ended June 30 to take sales from domestic rivals General Motors Co. and Chrysler Group LLC, two companies that have since emerged from bankruptcy.

‘Flying Off’ Lots

“The Ford Escape and Focus are flying off dealer lots and we’re doing all we can to ensure our dealers are well stocked,” Mark Fields, Ford’s president of the Americas, said in a statement. “We also are planning a significant increase in fourth-quarter production compared with last year, continuing to match production to the real demand.”

The automaker’s share of the “clunkers” program is 16 percent, and the retail share was 13 percent prior to the initiative, George Pipas, Ford’s sales analyst, said in a briefing with reporters. The company’s sales in August will be “very strong” if the sales pace keeps up, he said.

About $300 million of the $2 billion allocated this month for the federal “clunker” program has already been used, and funds are being used at a pace to run out in three weeks, said Ellen Hughes Cromwick, Ford’s economist.

Ford rose 20 cents, or 2.6 percent, to $7.90 at 10:50 a.m. in New York Stock Exchange composite trading. The shares have more than tripled this year.

Chrysler Production

The automaker, which lost a record $14.7 billion last year, hasn’t earned an annual profit since 2005. The second-largest U.S. automaker had second-quarter net income of $2.26 billion after an accounting gain. Its operating loss of $638 million was less than half of what analysts projected.

Chrysler, the third-largest U.S. automaker, is increasing its second-half production schedule, a person familiar with the situation said this week. Its Jeep Wrangler plant in Toledo, Ohio, and Dodge Ram pickup plant in Warren, Michigan, have scheduled overtime and its minivan plant in Windsor, Ontario, is operating with a third shift.

Vehicle inventory at Chrysler at the end of July fell to a 40-day supply while the industry average is 60 days.

More/Link:Ford Boosts Second-Half Output By 26 Percent on Sales (Update1) -
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