Job cuts are a measure carried out to decrease expenses, which usually happens in declining industries or businesses. On the other hand, growing industries and businesses create jobs, and it can be taken as an indicator of the future growth. The automotive industry is expanding operations and growing jobs.
Increased shifts and jobs to meet demand
Ford Motor Company (NYSE:F)’s F-150 is one of the best selling pickup trucks in the market, and the company is struggling to meet the demand. As a result, Ford Motor Company (NYSE:F) is planning to run three shifts at its Claycomo plant and the company will also add 900 jobs. The third shift will be in operation in the third quarter of the current year. Ford had already announced 1,100 jobs for the plant, and the new addition will take the total number of jobs to 2,000 – about half of these jobs will be given to new recruits, and the remaining posts will be filled by Ford employees who were temporarily laid off when the production plant for Ford Escape was moved.
The company has announced it will add 12,000 more hourly jobs by 2015, and the company is on its way to meet that target. Ford is investing $1.1 billion on its Claycomo plant, which will be focused on manufacturing F-150s and transit vans. At the moment, there are 2,450 hourly employees at the facility, which is producing F-150, SuperCab and SuperCrew.
Ford Motor Company (NYSE:F) is not alone in increasing the production capacity of its plants – General Motors Company (NYSE:GM) is also looking to upgrade its Kansas plant. The company announced that it would invest $600 million in its Fairfax plant for a new shop and other upgrades. While GM’s expansion will not create any new jobs, it will surely ensure the future of the workers attached with the plant.
Heavyweights expanding in Asia?
The Asian market is different than the North American market, and customers there prefer smaller vehicles. As a result, Ford Motor Company (NYSE:F) is focusing on smaller cars for these markets. The company is already reaping rewards from its investment in China, where the plant runs two uninterrupted shifts a day and employees work for as much as 10 hours per day. Furthermore, the company is increasing its presence in India and other neighboring countries – Ford Motor Company (NYSE:F) will open its first showroom in Myanmar by August this year.
General Motors Company (NYSE:GM) already has a strong position in the Chinese market, and the company is trying to further improve its market share. GM sells more vehicles in China than anywhere else in the world. The company is looking to increase its dealer network as well as production in the country to capture more sales. In addition, General Motors Company (NYSE:GM) plans to increase Cadillac’s penetration in the market by introducing four new models over the next four years.
Toyota Motor Corporation (ADR) (NYSE:TM) is probably the biggest player in the Asian market. The company is currently trying to increase the penetration of its smaller models such as the Yaris and Vios – these models have done well in Europe, U.S. and Japan, but the company is facing trouble in making them successful in China. It has worked on fuel efficiency and other improvements, but the sales have not picked up. Toyota Motor Corporation (ADR) (NYSE:TM) also faces a political problem in China, which caused the sales of the company to fall in the last year when tension increased between Japan and China over the disputed islands in the East China Sea.
Conclusion
Overall, the auto industry is an extremely attractive investment avenue as most of the companies are growing. However, Ford Motor Company (NYSE:F) remains the best pick in the sector, in my opinion. The company is growing at an incredible rate, the production is going up to meet the increased demand, and the global operations are also growing at an impressive pace. If you want to invest in a growing company with a solid base, then Ford motors is the best option available in the auto industry.
The article Ford Is The Best Pick in the Auto Industry originally appeared on Fool.com and is written by Ishtiaq Ahmed.
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