For U.S. auto factories, summertime isn’t downtime anymore
The decades-old tradition of shutting down U.S. auto factories for two weeks around July may be coming to an end, experts say, pushed out by strong demand and staggered vehicle launch dates.
With sales booming, Ford Motor Co., for example, said it will close 21 of its North American factories for just one week this year.
Only four of Chrysler’s 10 U.S. plants will close for two weeks this summer, and General Motors, also having a strong sales year, said it will not close any factories this summer.
“The institution of the summer factory closures has really begun to fray,” Alan Adler of General Motors’ Detroit-based news bureau said in an interview. “Fewer and fewer factories are bound by it. We have a ton of product launches this year, and we have healthy demand out there.”
“We have enough work for them to stay open,” he said.
Jeff Schuster, global forecaster for LMC Automotive, said the summer factory closings around the Fourth of July holiday date back to a time when almost all vehicle launches took place in the fall.
Factories would shut down in the summer to retool for the new vehicles, Schuster said.
During the 1990s, it was a tradition that was reinforced by bad times in the U.S. auto industry, seen as a fairly painless way to reduce costs.
But the Big Three U.S. automakers, led by Ford, are seeing sales growth this year.
Through the first four months of the year, Ford has sold 808,800 vehicles in the U.S., a 12.7% gain from the same period a year earlier. Its U.S. market share has jumped to 16.3%, from 15.4% in the same period a year earlier, according to Autodata Corp.
General Motors’ share of U.S. auto sales stood at 18.1% through the first four months of this year, up from 17.7% in the same period a year earlier. Chrysler Group’s share of the market rose to 11.8%, from 11.6%.
Asian auto brands have seen their sales slip to a combined 44.9% of the U.S. market in the first four months of 2013, down from 46.3% a year earlier.
Moreover, Schuster said, vehicle launches can come at any time of the year now and are tied more closely to big events, such as major auto shows.
“Vehicles launches are spread throughout the year now. You can have a 2014 vehicle launching in February,” Schuster said.
This year, in particular, none of the U.S. automakers want to be caught with a short supply, Schuster said.
“There is a general expectations that sales in the second half of the year are going to be even stronger than the first half,” he said.
Ford is having such a strong year that it has plans to boost its production by 200,000 vehicles, to 3.4 million. That will mean more workers and more shifts.
“Sales have been going very well for us, and we are doing everything we can to keep up with demand,” said Erich Merkle, U.S. sales analyst for Ford, referring to summer factory schedules.
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