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Published: Friday, 8/14/2009

Ford to build 33% more vehicles in fourth quarter

ASSOCIATED PRESS

DEARBORN, Mich. - Ford said yesterday it will build more Focus and Escape models and boost overall production of cars and trucks this year to help dealers restock depleted showrooms.

Ford Motor Co. needs to keep up with demand for its Focus compact and Escape crossover, both top sellers in the federal government's "cash for clunkers" program. It also wants to maintain a reasonable level of cars and trucks so its dealers won't run short on hot models later this year.

"Cash for clunkers," which kicked off last month and has revived industry sales for the moment, uses rebates of up to $4,500 to entice drivers to trade in older, gas guzzlers for more fuel-efficient vehicles. To be eligible, "clunkers" must have combined city/highway mileage of 18 mpg or less when they were new.

Ford's overall vehicle production will be 2 percent higher than it expected in the third quarter. It also plans to boost its fourth-quarter output of cars and trucks by 33 percent from a year earlier.

While funding for the clunkers program is likely to run dry by September, the company said, the additional vehicles produced in the quarter will go to replenish dealer stocks. Ford is struggling to keep up with demand after paring down inventories earlier this year.

"That should give us some time to reload before 2010 begins," said George Pipas, Ford's top sales analyst. "Dealers will be dealing with historically relatively low inventories for some time to come."

The automaker, which has steadily gained sales since General Motors Co. and Chrysler Group LLC took government aid and went through bankruptcy proceedings, reported a year-over-year sales increase of 2.4 percent in July, the first such jump since November, 2007.

Ford is the latest automaker to increase its production.

Honda Motor Co. is adding Saturday overtime shifts at its assembly plants in East Liberty, Ohio; Lincoln, Ala.; and Greensburg, Ind.

Toyota Motor Corp. last month began increasing production of "core" models such as the Corolla sedan - the best-selling new model for traders of clunkers - the RAV4 crossover, and the Tacoma truck at its U.S. plants.

And Hyundai Motor Co. is recalling more than 3,000 employees at its plant in Montgomery, Ala.

Chrysler is adding overtime at most of its plants to respond to expected demand for its 2010 models.

GM is being more cautious. Mark LaNeve, GM's vice president of U.S. sales, said the company is doing careful analysis on whether to increase production, but no final decisions have been made.

Ford plans to build 10,000 more Focuses and Escapes this quarter. As a result, total production will rise to 495,000 vehicles in the period, up from the 485,000 expected.

The Focuses will be built at the Wayne Assembly Plant in Michigan, where Ford will add Saturday shifts and weekday overtime to boost production. The Escapes will roll out of Ford's Kansas City Assembly Plant, where employees have agreed to work two days during a planned shutdown week in August.



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