LEARN MORE


Bad Tires & Softening Market

Light vehicle production in the NAFTA region seems to be hitting a few bumps in the road.

Light vehicle production in the NAFTA region seems to be hitting a few bumps in the road. Ford's well-publicized issues with the Firestone tire recall have certainly slowed its production rate. Additionally, the accelerated pace of overtime found at some Ford passenger car facilities and most light truck facilities is beginning to tail off.

The third quarter of 2000 will have the dubious honor of being the first to not set a year-over-year record since the GM-UAW labor disruptions of mid-1998. For seven straight quarters, new records were set. Despite the shortfall, light vehicle production this past quarter only fell short of last year's pace by 3%.

As of mid-September, Ford has deleted three weeks of production from the schedules at Ford-Edison (Ranger/B-Series), Ford-Twin Cities (Ranger) and Ford-St. Louis (4-door Explorer). In total, the direct loss of production could approach 16,000 Explorers (U150 4-doors) and 25,000 Ranger/B-Series pickups (P150/151). With overtime, Ford can replenish 10,000 to 15,000 units over the next four months but only recover 5,000 units of U150 Explorer. As the launch of the U152 Explorer approaches, Ford will be careful not to overbuild the older model.

DaimlerChrysler has shaved overtime from several of its SUV facilities, and has scheduled downtime to control inventories—and it is expected to continue to do so. Specifically, these actions affect DCX-Toledo-Main (Cherokee), DCX-Jefferson North (Grand Cherokee) and DCX-Newark (Durango). All are softening in the face of new competitors, and because of a tightening of the overall market expected for the fourth quarter of 2000.

GM continues to have issues with respect to passenger car builds. Overall builds for the 2000CY are slated to be off 2% as GM continues to add incentives to the bulk of its fleet in order to respond to strong competitive challenges. On the truck side, despite an anticipated shortfall in light truck production versus 1999, GM has shifted its mix to generate higher profits and mix. Evidence of this is the addition of Flint Truck to the GMT800 program and conversion of GM-Arlington to build the platform.

In summary, the CSM light vehicle forecast for NAFTA is unchanged from the prior setting. Although Ford will experience somewhat weaker builds in light trucks through the fourth quarter, other OEMs will consume the difference, allowing the total forecast to hold at 17.3 million units for 2000CY.

Comments are reviewed by moderators before they appear to ensure they meet Automotive Design & Production’s submission guidelines.
blog comments powered by Disqus