Ramping Up Production Ford’s Main Challenge, CEO Says

DETROIT – The greatest challenge facing Ford in 2013 is ramping up production to meet increased volume in the U.S. market, CEO Alan Mulally says.

 The auto maker estimates the U.S. market will account for 15 million to 16 million units this year, up substantially from 14.8 million last year.

During the height of the global recession, Ford cut production to better align capacity with demand. Now it needs to boost capacity, even as most of its assembly plants already are running on three shifts.

Mulally says Ford also has to make sure its supply base isn’t overstretched as the auto maker increases its output, noting many suppliers downsized during the recession.

“We’re paying a lot of attention to suppliers,” he says, addressing an industry gathering at Automotive News World Congress here. “When we went through the recession, it wasn’t just us that lowered production and took out capacity. All the other OEMs did the same thing, so suppliers really had to restructure.

“Issues we’re seeing mainly are associated with (suppliers) coming back. That held us back last year, but I think we’ve moved past that now.”

While boosting U.S. production, Ford also will keep an eye on quality after being stung by several recalls last year of high-volume products, including the Fusion midsize sedan and Escape cross/utility vehicle.

Mulally says the callbacks were due to technical glitches and a manufacturing issue.

“We did all the testing and analytical work, and we learned there were a couple of modes in there that we didn’t anticipate,” he says. “We added that into our test procedures so we’ll catch it next time. We’re always learning new things, and we’ll fix the processes.”

Ford also has to address its decline in quality rankings of influential industry publications such as Consumer Reports. Last year, the auto maker experienced the largest drop of any OEM in CR’s reliability survey, falling from the top five in the rankings just three years ago to 27th out of 28.

Mulally says most of the drop was due to the auto maker’s MyFord Touch infotainment system, which has been widely panned for being sluggish and confusing, and the PowerShift transmission in Ford small cars that consumers say is balky.

“We know what to do, and we’re dealing with it now,” he says.

The auto maker will follow the same plan as with its core Ford brand while reinvigorating the Lincoln luxury division, Mulally says. “It’s not like it’s a new thing. We know how to do it. We’re excited because we’re making a reasonable return on Lincoln today, so (it’s) not like a moon shot.”

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