Ford's Forecast: It's Not Just Us

(MoneyWatch)  Ford revealed the gory details of its recently reported production cuts, but more importantly showed a much more pessimistic outlook beyond simply cutting back on building too many trucks.

Besides its own troubles, Ford's announcement includes a heavy element of, "Hey, it's not just us, the whole industry's in trouble." Ford cut its full-year forecast for the entire industry to a range of only 15 million to 15.4 million vehicles, including medium and heavy trucks.

The middle of that range translates to fewer than 15 million "light vehicles," excluding medium and heavy trucks. That would be the worst result in more than a decade, and a sharp comedown from U.S. sales of about 16.1 million light vehicles in 2007. Some analysts thought J.D. Power and Associates was too pessimistic when it predicted in March that industry sales would fall below 15 million, but as other forecasters follow suit, J.D. Power's forecast will be in the middle of the pack pretty soon.

Cutting the industry forecast seems like an obvious call in light of the high price of fuel, the troubled economy, and the fact that the domestic brands are out of step with changing consumer demand for small cars and fuel-efficient vehicles. No doubt, Ford means what it says when it says the entire industry is in trouble.

But cutting the entire industry forecast is also a face-saving device that allows Ford to project it will maintain its market share, even if its sales decline. If Ford just cut its own production and sales estimates and left the rest of the industry alone, that would imply that Ford expects to lose market share, which no automaker likes to admit.

Ford also cut its profit outlook, so that leaves maintaining market share and achieving its cost-cutting targets as just about the only silver linings left in 2008, provided Ford can achieve those goals.