Ford Actually Boosts Production
Ford Motor Co., benefiting from the Obama administration's cash-for-clunkers program, is boosting production of its Ford Focus compact car and its Ford Escape small crossover so it can replenish dealership inventory.
On Thursday, Ford said it plans to build 495,000 cars and trucks during the July-September period.
That's 35,000, or 18 percent, more than the same period last year and 10,000 more than Ford was planning for in June. Ford also said it plans to build 570,000 cars and trucks during the last three months of this year, or 141,000 more than last year.
Ford's announcement Thursday was the fourth time this year that the Dearborn automaker has increased its production plans, and it underscores the company's progress toward its goal of selling more cars.
"We had the right product at the right time," Ford sales analyst George Pipas said during a media event Thursday.
Both the Focus and Escape are among the 10 most-popular vehicles purchased under the cash-for-clunkers program, which provides vouchers of between $3,500 and $4,500 to consumers who trade in older vehicles for new, fuel-efficient models.
Pipas said Ford has grabbed 16 percent of the total sales from the program. While that is in line with the company's total market share for the year, he noted that being a top seller of more fuel-efficient models "is an accomplishment" for a company best known for its trucks.
The surge in demand caused by the federal program that began last month left Ford dealerships with just a 25-day supply of Focus cars and a 21-day supply of Escape crossovers at the end of July. Experts consider an inventory of about 60 days' supply to be ideal.
But even with the increased production and the recently approved $2-billion federal funding increase, Ford will struggle to replenish dealership lots before the money is depleted. At current sales rates, Ford chief economist Ellen Hughes-Cromwick estimated funding will expire in three to four weeks.
Ford already had a fairly aggressive production schedule that is helping the automaker close many sales with incoming inventory quickly. To further help dealers, Ford is also reprioritizing vehicle shipments so vehicles in high demand, such as the Focus, Escape and Fusion midsize sedan, arrive faster.
Ford said cooperation from the UAW and suppliers was crucial in allowing the automaker to increase production.
At Ford's Kansas City Assembly Plant, which builds the Escape, employees agreed to work next Friday and Saturday, forgoing the plant's scheduled summer production shutdown to help build more Escape crossovers.
At its Wayne Assembly Plant, Ford plans to make 6,000 additional Focus cars over the next two months through increased overtime and Saturday production shifts.
However, Ford is struggling to boost production of its Ranger small pickup until the last three months of this year. In July, Ford sold 7,695 Rangers, a 64.5 percent increase compared with last July. Said Pipas: "We are doing as much as we can."