Skip to comments.US Car Makers Crank Out Cars Around the Clock; Who is Buying the Cars?
Posted on 08/18/2013 10:32:38 AM PDT by Kaslin
US car makers are cranking out cars three shifts a day. The goal is to run plants around the clock, 365 days a year, even eliminating breaks.
Please consider Open All Night: America's Car Factories.
Nearly 40% of car factories in North America now operate on work schedules that push production well past 80 hours a week, compared with 11% in 2008, said Ron Harbour, a senior partner with the Oliver Wyman Inc. management consulting firm.Who is Buying Cars?
"There has never been a time in the U.S. industry that we've had this high a level of capacity utilization," he said.
But fresh from a near-death experience during the recession, auto makers are reluctant to put money into bricks, mortar and machinery that could become a drag on profits if car sales fall. Volkswagen new $1 billion Chattanooga, Tenn., factory recently cut 500 workers after sales of its new Passat sedan swooned.
Through a series of agreements negotiated with the United Auto Workers union, the Detroit Three now can schedule work at night and on weekends without paying as much in overtime as they would have in the past. Adding a third shift, as many plants have done, also reduces overtime. Overtime pay also starts after 40 hours a week, not after eight hours a day as in the past. On top of those savings, a newly hired Big Three factory worker now earns about $15 an hour versus $28 an hour for veteran workers, under postrecession labor pacts.
Toledo factory managers recently changed break schedules to squeeze out even more production. Instead of shutting down the assembly line eight times a day for routine breaks, they have hired extra workers to fill in during breaks, so the line doesn't stop running.
GM is running six of its U.S. plants through the night on three-shift schedules. Last year, GM produced 3.24 million vehicles in North America compared with 4.52 million in 2007when it had five more assembly factories.
Ford has gone a step further, adding a fourth crew of workers at some engine and transmission plants to keep those factories running 152 hours out of the 168 hours in a week.
The techniques have helped expand production by 600,000 vehicles during the past 15 monthsthe equivalent of about three assembly plants, says James Tetreault, Ford's vice president of North America manufacturing. Ford doesn't plan to build a new North American assembly plant, he says.
"In an ideal world, we'd like all our plants to run around the clock, 365 days a year," says Mr. Tetreault. "That would be a financial dream. But we don't know how to do that yet."
In recent years, auto makers have developed a bevy of pint-size models like the Chevy Sonic, Fiat, Ford Fiesta and Kia Soul, and promoted them using social-media, music festival sponsorships, and in some cases, daredevil stunts. To hype the new Chevy Sonic, General Motors Co. filmed the subcompact parachuting out of a plane for an online campaign aimed squarely at 18-to-30-year-olds.Millennial Generation "Big Prize"
But the largest customers for these cars, about 42% of buyers this year through May, are closer to retirement age, according to registration data compiled by car-shopping website Edmunds.com. The proportion is up from just 29% five years ago.
Meantime, the percentage of 18- to 34-year-olds buying new subcompact cars fell to 12% through May, down from 17% in 2008, according to registration data.
Of course, 50 and 60-somethings are some of the biggest buyers of all cars.
"The baby boomer generation is the largest cohort in the marketplace," Kia's Mr. Sprague said. "Just by virtue of their numbers being so large, we'll continue to see them skew the data for a long time."
Last year, buyers 55 and older accounted for more than 40% of all new car sales, up from 33% in 2008 while buyers between the ages of 18 and 34 represented only 12% of new-car purchases. And that is down from 14% five years ago, according to Edmunds.com.
Auto makers' big prize is the "Millennial Generation"that group of consumers in their 20s and 30s whose numbers could rival the postwar baby boom that has dominated the auto market for decades.
Hey they’re making things in America.
I’m all for it.
Bought one myself.
That must be a logistical and training nightmare. The breaks all have to be staggered and can't occur at the same time. The people filling in during breaks have to be trained in lots of different assembly tasks. As for staggering breaks, workers probably don't want to start a shift and have to take a ten minute break after working for twenty minutes, then work 3-1/2 hours until lunch. Maybe they are taking the managers, office workers, designers, etc and putting them on the line during the breaks?
There’s a lot of cars out there - I’m getting stuck in traffic all the time.
There’s a lot of cars out there - I’m getting stuck in traffic all the time.
>>That must be a logistical and training nightmare. The breaks all have to be staggered and can’t occur at the same time.
I’ve worked in five factories in my career as an industrial electrician. All of them ran 24/7 and none of them stopped the production line for breaks. They all keep some extra people on a production crew who do light maintenance (oiling and wiping type of stuff and assisting the mechanics) and once break time hits, they start filling in on the line for break and meal relief. This isn’t anything new.
I wonder how they are doing maintenance? At some point quality will suffer.
Drove by a dealership yesterday and saw a Crown Vic up for $7.5k that looked like it had just come off the show room floor (maybe a 2009). Sorry folks, not interested in a $35k SUV when I can buy something as good (for me) for 20% of the cost and drive it for many years and many miles with no payments.
I may be frugal, but I'm not cheap...
In Chicago it's the opposite. Since Obozo's emaculation the level of traffic congestion has dropped noticeably. And it ain't because of any new roads. I guess that mass under-employment has its upside to those left in the workforce.
I wished I could by a new car for myself, one that is easier for my old bones to get in and out of, but I don't want to get stuck with car payments at my age
It’s funny, I worked in dozens of utility and industrial power plants in my early career, and they never shut them down either. I never once thought who filled in during breaks and lunch. I know lots of operators would eat lunch in the control room.
Well I’ve “recently” taken to buying new. So far 110,000 miles on two cars, with zero issues.
And American as well.
So far I’ve real happy with that decision.
Well I don’t want to get too specific.
Not a GM car though. :D
Many of those vehicles mentioned are TRUCKS. Trucks for the oil boom in Texas, Pennsylvania and North Dakota. Contractors buy trucks. And individuals buy trucks here in the vast flyover, many of those trucks are the family car, something north-easterners have no understanding or tolerance for.
Strange thing about Ford. Dealer where i live gets one yr old cars and sells them at good price (for dealer) with all the fixings of a new car. Sell like hotcakes. I was told these are cars that are used by big companies for yr, then given back to Ford.
Seniors buying a lot of new cars here. Also, cars of today are nothing but plastic. Sorry cars. But they are good on gas
UAW backs liberals like Obama who in turn impose anti-American laws (like Obamacare). So, I’m not sure if buying “American” is really all that American after all. Seems to me Red America buys a higher percentage of domestic vehicles than what is sold in blue state/blue democrat liberal areas, and then the UAW gets that money and uses it against you. NICE!!! Let them sell their vehicles to the liberals. I’m out. If they want to engage in national politics like that then they should suffer the economic consequences, just like I will when Obamacare is imposed.
UAW go sell your cars to the liberals who won’t buy them. Maybe you can convince the the Liberals to buy your cars after you tell them you helped get their President, and every other Liberal Senator and Congressmen elected. See if that will help them switch from Honda to you.
In the mean time, Red America- Wake up and stop destroying yourself, and sending your hard earned money to being used against you.
I think I saw Homer Simpson do that once....spilled his coffee into the control board.