Ford raises output as "clunker" sales surge
DEARBORN, Michigan (Reuters) - Ford Motor Co (F.N) said on Thursday it was increasing production after a surge in sales ignited by the U.S. "Cash for Clunkers" program.
The No. 2 U.S. carmaker said it would build another 6,000 Focus sedans in the current quarter by adding overtime and a Saturday shift at an assembly plant in Wayne, Michigan.
A second plant in Kansas City, Missouri, will increase output of the Escape, a small SUV, by another 3,500 vehicles, reversing plans to shut down for two days this month.
The actions take Ford's third-quarter output in North America to 495,000 vehicles, up 18 percent over a year ago.
Ford also set a fourth-quarter production target of 570,000 vehicles, which represents a 33 percent gain over last year.
"I think we were surprised by the speed and the urgency with which consumers went to dealers," Ford sales analyst George Pipas said.
GETTING MILEAGE OUT OF CLUNKERS
Ford is one of the big beneficiaries of the $3 billion auto sales stimulus program, which offers payments of up to $4,500 to people who trade in older, less fuel-efficient vehicles for new, more efficient ones.
Ford took 16 percent of the deals made under the "clunkers" program, compared with a retail market share of 13 percent this year to date. The company had a sales increase in July, for July, its first since late 2007, and it has been gaining U.S. market share.
Standard & Poor's equity analyst Efraim Levy told clients in a note that Ford and some Asian brands had been the biggest gainers from the vehicle trade-in program.
Ford did not ask for government bailout money and is the only U.S. automaker to have avoided bankruptcy.
The company had previously planned to announce detailed production plans in early September but said it had been forced to act earlier because sales were still strong in early August. Like other automakers, Ford was caught off guard by the success of the program, which began in July.
Ford executives said funding for the "clunkers" program could be exhausted by late August or early September.
PRODUCTION LINES HUMMING
Other automakers have also raised production. General Motors Co GM.UL said that by the end of August it would provide plans for stepped-up production for the rest of 2009. Continued...
