Four years after narrowly averting bankruptcy, Ford finds itself facing a far more desirable problem: Demand is outstripping its production capacity in the US.
Ford clocked its best July sales since 2006, with deliveries up 11% from a year ago to 193,715 vehicles. But the company said sales of certain models, including popular ones like the Focus and Fusion, were limited because of tight inventories.
Instead of getting carried away by the demand spurt and building new plants, the Detroit-based carmaker is finding ways to squeeze even more production out of its existing factories across North America. Ford is reducing supplier bottlenecks (placing orders earlier, improving communication with suppliers to prevent falling short on components), increasing assembly-line speed and starting round-the-clock production in some plants to roll out more vehicles per hour.
Ford has also been on a hiring spree. The company increased white-collar hiring from 2,200 to 3,000 in 2013, its biggest salaried hiring initiative since 2000. The auto giant is also looking to add 12,000 hourly jobs by 2015.
Ford’s rivals too are gearing up to meet the increased demand, which is expected to cross 16 million vehicles this year, the most since 2007. Chrysler is adding capacity and nearly 300 jobs at a Michigan engine plant. Honda will invest $215 million to boost capacity in Ohio, including about $180 million at an engine plant. General Motors, which is in the midst of launching 18 new or updated vehicles this year, announced that it will increase its investments in its Tennessee plant by $187 million so that it can build two new midsize cars.