Supply chain limitations are hampering Ford’s ability to meet the vehicle demand. As a result, Ford CEO Alan Mulally said the company will ramp up production for the rest of the year, The Detroit News reports.
“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,” Mulally told The Detroit News.
Like many other automakers, Ford will add shifts at its plants and modify work schedules through the summer to meet increasing North American demand. Raised incentive levels this month may be putting increased pressure on Ford’s plants after the automaker lowered incentives in April.
Despite Ford’s eagerness to increase production, a few suppliers are reluctant to boost capacity over fears of a sudden sales slowdown like the one that hit American automakers in 2009. That dramatic decline put many suppliers out of business, and forced automakers to close dozens of plants. Surviving suppliers are already running near 100 percent capacity.
Still, Ford is charging ahead with its plans for increased production, adding extra shifts at its Wayne, Mich. assembly plant, Chicago Assembly, and Kansas City Assembly plants. In September, a third shift will be added at the Louisville Assembly in Kentucky as well.
Ford’s U.S. sales analyst Erich Merkle told us these extra shifts will add capacity for the models in highest demand, including the Focus, Explorer, and all-new 2013 Escape crossover. Merkle also told us Ford is foregoing the traditional two-week summer shutdown at 13 of its factories, which will instead close for just one week. This additional production time will yield nearly 40,000 more units.
The revised summer schedule will help Ford meet its goal of raising annual production capacity to three million units – a 400,000-unit increase. By the end of 2012, Mulally believes Ford will be more on track with production but told The Detroit News “we’ll take a hit in the near term.” At the moment, he says there are no plans to bring more plants online.
Source: The Detroit News