Ford, GM and VW say production and new vehicles are back on track
Major automakers are pushing full steam ahead to ramp production even as they continue developing autonomous vehicles of the future, leaders of Ford Motor Co., General Motors Co. and Volkswagen AG said Wednesday.
Executives from the three automakers headlined the first day of the Deutsche Bank Global Auto Industry Conference, and reported mostly smooth sailing since auto production resumed in North America last month amid the coronavirus pandemic.
Ford expects to return all of its U.S. plants to full, pre-COVID-19 capacity by July 6, Chief Operating Officer Jim Farley said. He reported that in the three weeks since production restarted, Ford has built approximately 96% of its planned volume and is in the process of adding a third shift back to key facilities.
GM expects to be at normal production capacity by the end of June "or sooner if possible," Chief Financial Officer Dhivya Suryadevara said: "Demand is strong from a customer perspective, so we have been gradually ramping up to meet that demand."
The Detroit automaker also is beginning to introduce overtime again, spokesman Dan Flores confirmed. First shift at the plant in Arlington, Texas, is being called to work on Saturday as the company boosts production of its new full-size SUVs. The company is returning the third shift on Monday.
As suppliers are able to increase their production, so can the automakers, said Scott Keogh, CEO and president of Volkswagen Group of America: "From what we can see right now, the supply base in the U.S. is stable-ish. And Mexico is getting online as we speak."
All three automakers said they are pushing forward with electric- and autonomous-vehicle development, and that the coronavirus crisis may even have made some of these programs more appealing to customers despite the current economic downturn.
"I think people have (now) seen what clean air looks like," said Keogh. "And I think people have seen what happens when a society is unprepared. ... I see trends to electrification coming out of COVID, but these are still early pulses."
Ford and VW took a step forward on their development of next-generation vehicles Wednesday when they completed an alliance under which the competitors will collaborate on the development of several new products. The alliance, first announced last July, will produce a medium pickup truck built by Ford and sold by VW as the Amarok; two commercial vans, one built by VW and the other by Ford; and an electric vehicle for Ford of Europe, built on VW's EV architecture.
The companies, which will remain competitors in the marketplace, say they will produce up to a combined 8 million pickup trucks and commercial vans.
Ford and VW both have invested in self-driving software company Argo AI, whose technology they will use to develop autonomous vehicles. The alliance structure allows them to save on development costs for technology that is considered the future of the industry but which is not expected to yield returns for several years at least.
Ford executives said Wednesday that they do not expect the launches of key products, including the redesigned F-150 pickup truck, to be delayed any longer than the eight-week shutdown period.
Suryadevara of GM reported that the automaker's cross-over vehicle and truck assembly plants have been adding shifts.
Asked about the automaker's free cash flow, she acknowledged that cash the company had expected to generate this quarter might get pushed out to the third quarter, depending on the timing of ramping production back up to full capacity.
GM is pressing ahead with its plans to invest $20 billion over the next five years on EV and AV programs, she said: "While the reveals (of planned EVs) may have been delayed, the product timelines ... have not been impacted. We're all-in on electrification."
And, despite recent layoffs at GM's self-driving subsidiary Cruise, the "mission continues unchanged," Suryadevara said. Cruise "is incredibly well-capitalized, which is very important in times like this."
Another result of the coronavirus shutdown, automotive executives noted, was the acceleration of a digitized car-buying process. Farley reported that 72% of Ford dealers in North America now offer online sales, and about 25% of sales are done online.
Staff Writer Breana Noble contributed.