Detroit puts the pedal to the metal this summer

Instead of the usual plant closings and furloughs, Ford, GM and Chrysler are keeping the assembly lines rolling to meet strong demand.

By Jonathan Berr May 22, 2013 2:06PM
Ford Motor Co. employee attaching a wheel to a 2009 Ford F-150 pickup truck on an assembly line at the company's Dearborn Truck Plant in Michigan on Oct. 30, 2008 (© Jeff Kowalsky/Bloomberg via Getty Images)Facing a surge in sales as the economy rebounds, U.S. automakers are cranking up their production in North America this summer rather than following the usual seasonal practice of closing plants and furloughing workers. That's especially welcome news, given the slashed production Detroit endured during the Great Recession.

According to The Wall Street Journal, Ford (F) expects to produce 200,000 more vehicles in 2013 by reducing its planned summer shutdown and expanding its production lines. It's adding a third shift to its Kansas City, Mo., plant that produces its F-150 pickup, its most profitable vehicle. It's also hiring workers for the plant near Detroit that makes the Mustang and the Fusion sedan.

General Motors (GM), which is releasing 20 new models, isn't idling its plants at all this summer. And Chrysler, which is owned by Italy's Fiat, will close only one of its 16 engine, transmission and metal-stamping plants this summer, according to The Associated Press. Japanese automakers Honda (HMC), Nissan and Toyota are still planning seasonal plant shutdowns, the wire service said. 
 
Gains in North America are offsetting weaknesses in Europe, where automakers are shuttering plants and axing workers to stem losses there. The New York Times reported that some early signs say the industry in Europe is starting to recover, although sales continue to be dismal. April sales alone were the third-lowest on record.

Edmunds.com recently raised its 2013 U.S. sales forecast to 15.5 million vehicles, a level the industry hasn't reached since 2007 as American consumers are proving to be resilient despite frequent discussions in the press about the nation's fiscal woes and the continued economic problems in Europe. 

How long the good times will last is hard to say.

The Center for Automotive Research expects auto sales growth to slow to annual single-digit percentage increases from its rapid growth of the past few years. Production should fully recover to pre-recession levels in the next few years, though employment growth in the auto sector is slowing.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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