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Ford adds production in North America to meet new car demand

Workers hang a Ford Motor banner on the side of a building across from Cobo Center in advance of the media preview of the North American Int
Workers hang a Ford Motor banner on the side of a building across from Cobo Center in advance of the media preview of the North American Int

By Deepa Seetharaman

DETROIT (Reuters) - Ford Motor Co is adding a week of production at most of its North American factories this year to build an additional 40,000 vehicles and help sustain its gains in U.S. market share.

The second-largest U.S. automaker said on Wednesday that 20 assembly, engine and other plants will be idled for just one week this summer instead of the traditional two-week "summer shutdown" period.

This is the second year in a row that Ford has taken this step. Ford's U.S. rivals, General Motors Co and Chrysler Group LLC , are also limiting downtime this year.

The capacity boost comes as all three Detroit automakers gain ground in the U.S. auto market, now in its fourth year of recovery after an economic downturn that hurt new vehicle demand and forced GM, Ford and Chrysler to close factories.

Automakers are now running their plants around the clock to meet rising demand for cars. Last year, 14.5 million cars and trucks were sold in the United States, the highest level since 2007, when the industry operated more factories.

Newer models offer better mileage than the average U.S. vehicle, which is a record 11 years old. Growing strength in the U.S. housing market is boosting sales of trucks, like the F-series trucks, analysts and executives say.

"We went from four shifts on F-series to six shifts over the space of about a year," said Jim Tetreault, head of Ford's manufacturing operations in North America. "It's pretty dramatic increase in the demand on the truck side."

The added shifts, coupled with the shorter shutdown period, will help Ford build an additional 240,000 vehicles a year.

Ford shares were up 2.2 percent to $15.28 on the New York Stock Exchange. The stock price rose as high as $15.32, the highest level in about two years.

CHRYSLER, GM RUN FULL

Six Ford assembly plants, including a factory in Hermosillo, Mexico that makes the Ford Fusion and Lincoln MKZ midsize sedans, will have a shortened shutdown period this year.

About a decade ago, Ford operated 20 assembly plants in North America. Now, Ford has 11 assembly plants, each pushing to meet demand for trucks and new models like the Ford Fusion sedan. About 75 percent of Ford plants in North America are operating on more than two shifts a day, a historic high.

The U.S. auto market is up 7 percent for the first four months of the year, but Ford sales are up nearly 13 percent. GM has seen a 10 percent rise, while Chrysler is up 8.5 percent.

Chrysler announced Wednesday that three of its U.S. factories, including the Jefferson North plant in Detroit, will not observe the summer shutdown. The Jefferson North plant builds the Jeep Grand Cherokee sport-utility vehicle.

All of Chrysler's engine, transmission and stamping plants will work through the summer, with the exception of a transmission plant in Kokomo, Indiana.

GM does not have a formal summer shutdown period for its factories, but earlier this week Mark Reuss, who leads GM's operations in North America, said GM could not afford a break as the automaker revamps about 70 percent of its U.S. lineup.

"Right now, we're launching 23 cars and trucks, so it's pretty fluid," he told reporters.

(Reporting by Deepa Seetharaman; Editing by Eric Beech and Nick Zieminski)

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