Ford cuts N. American production, cuts profit goal
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Ford Motor Co. no longer expects to return to profitability by 2009 and is cutting North American production of pickups and SUVs for the rest of this year as high gas prices and the weak economy hurt sales, the company announced Thursday. Ford's announcement Thursday morning did not specify how individual plants will fare. The Ford Ranger pickup is assembled at the St. Paul plant; it is already scheduled to close Sept. 30, 2009.
The Dearborn-based automaker also cut back its projections for total U.S. sales in 2008 to between 15 million and 15.4 million vehicles. That's down from 17 million vehicles as recently as 2005.
"Unless there is a fairly rapid turnaround in U.S. business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American
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Automotive profitability goal," Ford President and Chief Executive Alan Mulally said in a statement.
Ford said it will cut production by 15 percent in the second quarter, 15 to 20 percent in the third quarter and 2 to 8 percent in the fourth quarter. The cuts will primarily affect pickups and sport utility vehicles, which have seen sales plummet in recent months.
Ford plans to increase its production of cars and crossovers through additional shifts and overtime. But the company's mix of vehicles remains heavily tilted to trucks and SUVs.
Ford had said in March it planned to cut second-quarter production by 10 percent and confirmed additional cuts at factories in Michigan and Kentucky earlier this week. But it revealed the full extent of the cuts Thursday.
Production cuts hurt revenues, because automakers book vehicles as sold once they leave the factory.
Consumers have been shifting to smaller, more fuel efficient cars in the last few months at a pace that stunned the industry. Through April, U.S. sales of subcompact cars shot up 33 percent, while sales of large SUVs were down 29 percent, according to Autodata Inc. Overall U.S. sales were down 8 percent in that period.
(Copyright 2008 by The Associated Press. All Rights Reserved.)