Ford plans to take an advantage over its two bankrupt US rivals, Chrysler and General Motor, by increasing production.
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The company says North American output will rise by 10,000 vehicles from its previous plan to 445,000 in the second quarter, and production will increase further in quarter three by 42,000 to 460,000.
Ford sales analyst George Pipas said that the company is taking advantage of factory closures at GM and Chrysler amid the worst US auto market slump in 27 years. Ford is increasing output mainly for pickup trucks and smaller sport-utility vehicles such as the Ford Escape and Edge.
Ford rose 38 cents, or 6.6 percent, to $6.13 yesterday in New York Stock Exchange composite trading. Its shares have more than doubled this year, for a gain bigger than those of all except three companies in the Standard & Poor’s 500 Index.
The company said in a statement that it “remains absolutely committed to continuing to make progress on our transformation plan without accessing emergency taxpayer assistance.”
Bloomberg News notes that although Ford borrowed $23 billion in late 2006 before credit markets tightened, it has so far avoided taking on emergency government loans like GM and Chrysler. In May, Ford raised $1.6 billion with a public stock offering, after trimming $9.9 billion of debt through buybacks completed in April. The company has also won concessions from the United Auto Workers union which will result in cutting labour costs by $500 million a year.
