Excess CapacityConcept summarized by Sam Mishra, MBA (MIT Sloan)
The capacity to produce additional products / services without increasing variable costs significantly. This is an uncompetitive situation, since resources go underutilized. Examples include Ford and GM automotive plants suffering from excess capacity. At the time of writing (2007 - 2008), both these auto giants are being forced to close more and more plants and relocate the employees of the closed plants elsewhere, or terminate their employment.