It Starts: Shutdowns, Production Cuts, Layoffs at Auto Plants
by Wolf Richter
WolfStreet.com
October 17, 2016
“We continue to match production with demand”: Ford
It’s been years since we’ve heard about production cuts by automakers, but here they come.
After a record-breaking 2015, the hot air is audibly hissing out of the auto industry. September sales were down 0.5% from a year ago. Year-to-date sales were about flat. Some individual models got clobbered. Inventories are piling up on dealer lots. Automakers lavished incentives on the market. Nothing worked.
Yet, auto production in September had jumped 7.3% year-over-year, according to the industrial production report this morning. In my article earlier today on this phenomenon [Is this Why US Industrial Companies Don’t Invest?], I explained: “Something has to give: either a miraculous jump in sales or a cut in production.”
The digital ink wasn’t even dry when we got the answer from the horse’s mouth. And no, sales hadn’t miraculously jumped. Instead, production is going to get cut.
The harbinger that auto sales and swelling inventories would hit production and manufacturing came on October 11, when Ford announced that it would halt production of Mustangs for a week at its Flat Rock Assembly Plant.
The Rest…HERE
