Longtime crosstown rivals Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) trudged through the financial crisis and following recession taking very different paths, but both have returned to a vastly improved business model and strategy. Both have developed a handful of popular and fast-selling vehicles requiring a hiring spree to help match supply with demand. The auto industry accounts for roughly 4%-5% of U.S. GDP; when healthy, it is an important part of our economy. Recent hiring is a great sign, so here are the details why it’s important for investors.
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.
Ford will continue to add jobs to boost its inventory and a similar story is taking place at General Motors Company (NYSE:GM).