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Saturday, Aug 17
U.S. auto industry may be pushing capacity utilization limits: WSJ
- "There has never been a time in the U.S. industry that we've had this high a level of capacity utilization," Oliver Wyman's Ron Harbour says, referring to the ~40% of North American car factories (F, GM, FIATY.PK) that now produce vehicles more than 80 hours per week (that figure was just 11% five years ago).
- While the pace of annualized vehicle sales is running less than 2M shy of 2005's record 17.5M pace, WSJ notes that the industry employs far fewer works now than eight years ago, (647,600 workers last year versus 925,700 in 2005).
- Agreements struck with unions have allowed the Big Three to add shifts and work their factories on nights and weekends.
- Some say the industry is bumping up against the upper limits of production and will be forced to increase capacity by expanding plants or building new factories.
- Nonsense, says Ford VP James Tetreault: "As a manufacturing guy, I never say we're maxed out."