After losing money, it cut its break-even point from two-thirds of capacity utilisation to one-third.
How much to worry about capacity utilisation and how much to worry about possible margin shrinkage?
And as business investment has continued to outstrip the growth of demand, capacity utilisation is falling.
American nuclear power plants' capacity utilisation has risen from 56% in 1984 to more than 90% today.
Capacity utilisation is less than 75%, below the 80% level at which most volume car companies start to make money.
The review looked at all areas of Ford's business including product plants and timings, capacity utilisation and sourcing of vehicle and Powertrain.
This year he expects capacity utilisation to fall from 79% to 70%, as sales fall and the Koreans and German premium carmakers open new production lines.
ECONOMIST: Luxury cars are speeding ahead; lesser brands are stalled
Capacity utilisation has fallen, all four of the publicly-quoted chains lost money in their last full recorded year, and their share prices have crashed (see chart).
With enhanced visibility of inventory, quality, supply capability and demand fluctuations, we can expect to see reduced inventory, increased capacity utilisation and less waste in entire industry and multi-industry supply chains.
Thus profit margins depend crucially upon capacity utilisation.
In the land of lifetime employment (at least for many workers in big companies), Mr Ghosn shocked Japan by announcing the closure of five factories employing over 16, 000 people in Japan alone, cutting capacity by 30% to bring it more into line with sales and boosting utilisation rates to around the 75-80% rates at which car makers begin to make money.
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