This Growing Problem Could Threaten Ford's Big Gains

This Growing Problem Could Threaten Ford's Big Gains

Growing sales of models like the Escape have pushed some Ford suppliers to the limit. Photo credit: Ford Motor.

Ford reported strong earnings in North America this past week, a third-quarter profit of $2.3 billion. That came as Ford's sales have been increasing, but there's a new challenge emerging as Ford keeps pushing to increase production to keep up with demand.

What's the challenge? Bottlenecks at suppliers. Ford's new global purchasing chief said this week that some of Ford's key suppliers are maxed out, and that has the Blue Oval worried. Parts shortages could bring a Ford assembly line to a quick halt -- but if suppliers push too hard to keep up, quality could start to suffer.

In this video, Fool contributor John Rosevear looks at the problem -- and explains how Ford is moving to make sure its expansion plans can continue on schedule.

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Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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