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Big 3 cranks up production......

Big 3 cranks up production after surprising 1st quarter sales jump

From Automotive News

Big 3 automakers, caught flat-footed by expectations for a soft first quarter, are running factories nearly full tilt to catch up.

Dealers can expect shortages of some vehicles this summer when automakers complete production of 2002 models.

Barry Kelley, new-car sales manager at Lou Fusz Pontiac-Buick-GMC in St. Louis, says he does not expect to get enough 2002 Pontiac Grand Ams.

"I'll be sold out by Aug. 1 and lose August and September," Kelley said. "I'll have the '03, but people will be out looking for the '02s." Kelley also listed the GMC Envoy, Yukon Denali and pickups as being in short supply.

At Ford Motor Co., F-series Super Dutys are in short supply, and the company is planning factory changes to boost production. The Chrysler group is running overtime at 14 of its 17 assembly plants in North America during the second quarter.

Vehicle shortages may cut the traditional model-year closeout promotions, industry sources say. But GM's top forecaster predicts that heavy incentives will resume for 2003 models to build showroom traffic.

"You may not see as many '02 blowout programs, but I would hypothesize that what we're going to see is more aggressive '03 programs coming out of the chute," said Paul Ballew, GM executive director for market and industry analysis. "I'm not talking from a GM perspective but from an industry perspective."

The U.S. industry had a 58-day supply of vehicles, according to the latest figures from the Automotive News Data Center.

To assemble more Chevrolet Impalas and Monte Carlos, GM said it would add a 1,000-person shift to its Oshawa, Ontario, assembly plant beginning in September.

The shift will boost capacity by 100,000 cars a year. Stock analyst John Casesa expects GM to increase capacity at two other plants. He said GM will "shortly" add a third shift at the Pontiac (Mich.) East assembly plant, which would enable the company to produce 100,000 more Chevrolet Silverados and GMC Sierras a year.

Spokesman Dan Flores said the company is studying a third shift at Pontiac East.

Ford Motor Co. is cranking up production after being overly cautious after the Sept. 11 terrorist attacks. Ford cut 100,000 units from the fourth-quarter production schedule. Then GM introduced 0 percent financing, creating demand.

"On Dec. 31, 2001, we had our lowest end-of-year inventories since 1992," said Ford spokesman George Pipas.

Ford remained cautious going into the first quarter, thinking the fourth quarter had pulled ahead sales. First quarter production 2002 was 3 percent lower than first quarter of 2001.

"We could have produced more in the first quarter, but we were still cautious," Pipas said.

But the economy fooled the experts. By the second quarter, Ford was trying to build up stocks. Second quarter production is 4 percent higher than a year ago."All of the F-series plants have been running about 100 hours a week. That is maximum capacity with overtime, except Ontario, which is a single shift," Pipas said. F-series Super Dutys are in particularly short supply, and the company is trying to boost production capacity.

Pipas added: "Indications are that Ford dealers probably would like to have some more inventory. Dealers have been pretty enthusiastic about stepping up to the plate when the zone managers have gone out to take orders for the rest of the 2002 production."

Ralph Seekins, chairman of the Ford Division National Dealer Council, said, "The big question on dealers' minds is not so much, 'What should I order for buildout?' but, 'What is the Ford marketing plan going to be?'

"Dealers used to be able to plan six months down the road. Now the market is so dynamic that dealers are reticent to plan what is going to be built out in the fall. There isn't a dealer out there who is going to give up allocation of Super Duty trucks." He owns Seekins Ford-Lincoln-Mercury in Fairbanks, Alaska.

Ford is killing several models at the end of the 2002 model year: the Ford Escort sedan, Mercury Cougar, Mercury Villager and Lincoln Continental.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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