Demand brings need for jobs
Ford Motor Company (NYSE:F) has added 2,335 hourly jobs and 1,500 salaried jobs in the U.S. just this year, and has reached 75% of its goal to create 12,000 hourly jobs in the U.S. by 2015. Sales of the F-Series, America’s best-selling vehicle for 31 years, have increased 22% this year. To meet that surging demand Ford Motor Company (NYSE:F) announced yesterday that it will add 900 new jobs.
“Ford F-Series sales are the strongest since 2006, and we are increasing production to meet this demand,” said Doug Scott in a Ford Motor Company (NYSE:F) press release. “This is an important indicator that our economy is growing again. We are proud that Ford Trucks are helping more and more of our customers get back to work.”
It’s not just the F-Series having success: Ford Motor Company (NYSE:F) plans to increase production capacity by 600,000 units for surging demand across its vehicle lineup. Ford Motor Company (NYSE:F)’s Fusion, for instance, doesn’t have enough supply to meet demand, with plants rumored to be running at max capacity. Inventory levels for the Focus, Fusion, Escape, and Explorer models hit lows in June at 33, 39, 46, and 28 days, respectively – much lower than the desired 50-60 days of inventory.
Graph by author, information via Automotive News DataCenter.
Ford will continue to add jobs to boost its inventory and a similar story is taking place at General Motors Company (NYSE:GM).
Spring Hill
General Motors Company (NYSE:GM) announced today that it has increased its spending to $350 million at its Spring Hill assembly plant, and is expected to create or retain about 1,800 jobs. The cash invested will be spent on two midsize vehicle projects in the future. This will likely be a story told multiple times over the next few years as General Motors Company (NYSE:GM) undertakes its biggest vehicle lineup refresh in its history – planning to replace, redesign, or refresh 90% of its lineup by 2016. The assembly plant had also taken on the production of the Chevrolet Equinox late last year due to growing consumer demand.
Bottom line
From an investing perspective this is good news for multiple reasons. Firstly, it means that both Ford and General Motors Company (NYSE:GM) are more financially stable and have enough confidence in the rebounding automotive market to continue a series of hiring. Secondly, it means that Ford will be able to improve its supply to meet demand and will cease to lose sales from lack of inventory when production ramps up – consider that the Fusion is sitting on dealer lots for just 10 days, which is ridiculously short. Thirdly, it means Ford will have plenty of production capacity in time for its next generation F-150, which is responsible for a majority of Ford Motor Company (NYSE:F)’s profits and will debut next year. As Ford and General Motors Company (NYSE:GM) continue to add jobs, my optimism that both will remain very viable and profitable investments during the automotive industry’s rebound continues to grow.
The article Ford and GM’s Recent Success Spurs Hiring Spree originally appeared on Fool.com and is written by Daniel Miller.
Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.
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