Ford Motor Co. announced plans Friday to cut back further on North American production of big trucks and sport utility vehicles to adapt to a consumer shift to more fuel-efficient cars.
The sputtering US automaker said its move “responds to the continued deterioration in the US business environment and the accelerated shift away from large trucks and SUVs.”
“As gasoline prices average more than four dollars a gallon (3.78 liters) and consumers worry about the weak US economy, we see June industry-wide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades,” said Ford president and chief executive Alan Mulally.
“Ford has taken decisive action to respond to this accelerating shift in customer demand away from large trucks and SUVs to smaller cars and crossovers, and we will continue to act swiftly moving forward.”
Ford said it now expects US industry total sales for 2008 to be between 14.7 million and 15.2 million units, compared with the previous assumption of 15 million to 15.4 million units.
As a result, in the third quarter, Ford now plans to produce 475,000 vehicles, a reduction of 50,000 units from previously announced plans and a decline of 25 percent compared with the 2007 third quarter.
The output cut by Ford came a day after General Motors Corp. said it was halting development of its next-generation pickup trucks and sport utility vehicles amid soaring gasoline prices.
Ford said that with the auto market in a sharp downturn, its 2008 results from auto operations “will be worse than 2007,” with more cash to fund operating losses and restructuring.
Ford, which lost some 2.7 billion dollars in 2007, had been hoping to return to profitability by 2009 but that goal is becoming increasingly doubtful
“Unless the economy improves, it will be difficult for Ford to break even company-wide on a pre-tax basis in 2009,” Ford said.
Ford said it was delaying the launch of its new F-150 pickup, one of the leading full-size trucks, “by approximately two months due to the industry-wide slowdown in the US truck market and the need to sell down dealer inventory of the current model.”
At the same time, Ford is working to boost production of smaller cars like a new Ford Fiesta small car that goes on sale in North America in early 2010. It announced that four- and five-door versions of the next-generation European Ford Focus small car will be produced in North America beginning in late 2010.
“We view the move to smaller, more fuel-efficient vehicles as permanent, and we are responding to customer demand,” Mulally said. “In the near term, we are adjusting production to the actual demand – increasing small cars and crossovers and reducing large trucks and SUVs. For the long term, we are moving fast to introduce more small cars, crossovers and fuel-efficient powertrains — including more hybrids — and we will adjust our manufacturing facilities to match our updated product lineup.”
