Ford Cuts Production As Profit Hopes Fade

High Gas Prices, Weak Economy Prompt Automaker's Decision

(AP)  Ford Motor Co. no longer expects to return to profitability by 2009 and is cutting North American production for the rest of this year as high gas prices and the weak economy continue to hurt sales, the company announced Thursday.

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 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 due to rising gas prices and the slowdown in new home construction.

Ford plans to increase its production of cars and crossovers through additional shifts and overtime. Ford's smallest offering, the Focus sedan, saw sales jump 29 percent in the first four months of this year, while its Ford Edge crossover was up 38 percent.

But the company's mix of vehicles remains heavily tilted to trucks and SUVs. Ford's F-series trucks, long the best-selling vehicles in the U.S., were down 16 percent in the same period.

Ford said in addition to realigning its manufacturing capacity to produce more small cars and crossovers, it plans to accelerate the North American introduction of some of its small cars from Europe and South America.

Ford had said in March it planned to cut second-quarter production by 10 percent and confirmed additional cuts at a factory in Michigan 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.

Ford said it is on track to reduce North American automotive operating costs by $5 billion by the end of this year. But it said the rising price of steel and other commodities are offsetting expected gains from its new contract with the United Auto Workers.

Ford shares fell 28 cents, or 4 percent, to $7.52 in premarket trading.

[bcweitzel]

Posted by Glidescube:

"The response to how those lemons get repaired is the real issue. When you have a foreign car and something goes wrong, they stand behind it and fix the problem. Ford went way out of their way to screw me when I had problems, and I know Im not alone."

Oh, you mean like Toyota and Honda?

Bad news there, bub, they''re both made in the US! American Honda Motor Co started manufacturing cars in the US in 1982 with the Accord. Toyota, also in 1982, joined forces with *GM* for their first manufacturing facility in the US headquartered in Fremont, CA.

Pretty sure that most other "foreign" cars are already or will in the next few years be manufactured here because of import tariffs and the cost savings and extreme repeatibility of robotics and automation hardware.

I gotta laugh whenever somebody says Honda and Toyota are foreign... but if that floats your boat, then by all means keep paying higher prices for "foreign" cars! :-)

[hypnotoad72]

Two ideas:

1. Build ''em better; don''t import cheap parts from factories that only care about cheap profits. I haven''t driven a Ford lately, because the last two I had driven really had to be fixed or repaired daily... Never mind the problems relatives had... :(

2. Ditch SUVs and go for higher mileage vehicles and hybrids. Only certain families need that much space for so little reason, and anyone with 18 kids is a selfish jerk.

[hunterdon6]

I bought a new 2001 F-150 Supercrew pickup from Ford. The rocker panels on both sides rusted out. This was common for the early production of this 2001 pickup. Ford would do nothing. I decided then that was the last Ford I would ever buy. The big 3 kept building big gas hogs because they had a bigger profit margin on them. Now they don''t have a car to compete with Toyota and Honda for gas mileage and they wonder why their sales are falling. The Tucker automobile was way ahead of the American car companies and they knew they would have to spend alot of money to compete with it. So the big 3 destroyed the Tucker before it could be built. It is not the American peoples fault for these high gas prices, its the big corporations and our elected officials in Washington.

[gaye5]

Any manufacturer of cars deserves to loose big time, they know that we are going to have a problem with the price of oil thus they should be producing sun or water cars like there is no tomorrow, but it appears that they are doing nothing much about it and one can only wonder why???.. it will eventually make them the losers
I feel that many millions of people will have to give up their jobs because they cant afford the petrol to get to work and others will cut back on their use of cars plus they will reduce to only one car per family, thus manufacturers will loose trillions in the process, but it serves them right.. For years now they and oil companies have stopped any production of alternative forms of energy and transportation, they have either brought and destroyed the plans of any one who has come up with alternate ideas or they have kept these ideas in hiding...

[glidescube]

I agree that there are lemons now and again - read my original posts.

The response to how those lemons get repaired is the real issue. When you have a foreign car and something goes wrong, they stand behind it and fix the problem. Ford went way out of their way to screw me when I had problems, and I know I''''m not alone.

Not only that, but more and more people are having nothing but problems with their new Fords. On top of NOT honoring their warranties and standing behind their vehicles, they''''re also rolling more junk off the lines than ever before.

F*** ''''em - I''''ll never go back. I look forward to their bankruptcy.

Posted by hungry1968 at 09:13 AM : May 23, 2008


I feel the same way about GM

[navyjimfl]

The American auto makers knew in the mid 70''s that they should be building more fuel efficient cars but they are not totally at fault.....the huge fat wasteful american middle class couldn''t be seen driving a focus or geo metro.......got to have big gas hogs....now their paying......and paying.....

[afmca]

I feel sorry for the auto workers, but not for the Ford and GM execs and the companies. They fought and paid off the Repubs and many Demos for decades to keep the mileage standards low. All they built were bigger and bigger gas hogs. While the Japanese saw the future and made regular cars with good gas mileage and hybrids with even better mileage. I will promise you that none of the Japanese executives make 1/10th the compensation American executives make, but the beat them everyday in running smart, efficient, and profitable companies. Bankruptcies caused by decades of bad decisions and executive greed has become the definition for American style capitalism.

[singingrick]

These idiots lobbied Congress hard to not up fuel efficiency standards while Toyota and Honda made it a priority. Now American manufacturers are scrambling to catch up and probably won''t for some time.

[hungry1968]

Ford always made good vehicles .. sure, there is a lemon now and then, but thats true with all makes .. Ford is just riding through a bad turn in the economy, just like the rest of us.

Posted by oly_joe at 01:25 AM : May 23, 2008





I agree that there are lemons now and again - read my original posts.

The response to how those lemons get repaired is the real issue. When you have a foreign car and something goes wrong, they stand behind it and fix the problem. Ford went way out of their way to screw me when I had problems, and I know I''m not alone.

Not only that, but more and more people are having nothing but problems with their new Fords. On top of NOT honoring their warranties and standing behind their vehicles, they''re also rolling more junk off the lines than ever before.

F*** ''em - I''ll never go back. I look forward to their bankruptcy.

[marquis2582]

FORD.. IF U OVER LOOK BAD CREDIT AND START WORKING WITH PEOPLE WITH LESS THAN PERFECT CREDIT U CAN SELL A LOT MORE CARS AND SUVS...

[marquis2582]

IF THESE CAR DEALERSHIPS WASN''T SO CONCERNED ABOUT PERFECT CREDIT THEY CAN SELL A LOT MORE CARS AND SUVS HOWEVER, THEY WILL KEEP LOOSING PROFITS.UNTIL THEN THEY WILL CONTINUE TO CUT BACK ON PRODUCTION...

[cjs_cnet_xyz]

Ford''s problems are not only the vehicles it produces. A lot of Ford''s sales problems relate to how it has treated past customers. I weighed all factors before my last vehicle purchase. Ford''s denial of ignition stalling issues of my last Ford (by multiple dealers) was the last straw that swayed me away from purchasing from them. Ford''s inability to work out issues with International also reflected against them since I was purchasing a truck. I didn''t know if I could trust them to back their engines. Dealers tried to get me to purchase the earlier model year (with known problems without informing me). The multi-million dollar payout to procure its CEO didn''t help them either. I had trouble buying because I didn''t think I should have to subsidize such an outrageous salary for the product of a company that had already let me down once before. These a just some of the negatives. They did get points for being the first U.S. manufacturer to produce a real economical hybrid (the Escape). Unfortunately it wasn''t the vehicle I was looking for. So Ford will have to wait another 4 to 8 years before I contemplate another purchase. I like my new truck very much.

[payasyougo]

This is a typical reaction to a company that for a long time now can''t see past the next quarter.

Can you rememeber when American ingenuity and manufacturing actually set the pace?

[hungry1968]

Try a Chevy truck.Mines on order for june.My malibu has been a great car.Any warrenty work always came with a dinner and a free oil change.They couldn''''t do enough. Even called a week later to see if I was pleased.They got my return buisiness

Posted by labombaOH at 12:17 PM : May 22, 2008





I own a Toyota now, and only had one little problem with it (running a little rough). They replaced the computer control module for free (the problem), and washed my car and gave me a coupon for a free oil change.

THAT is how Ford should honor their warranties, instead of going out of their way to bone their customers.

F*** ''em.

[hungry1968]

Good!!

It serves you basttards right for screwwing me on my 2002 F-150. I can understand that cars and trucks have problems, but YOU EVIL SUCCKERS went way out of your way to NOT HONOR my warranty - an EXTENDED warranty I paid extra for.

It was only after I filed a claim in small claims court, that you FINALLY caved in and honored your end of the agreement.


I gladly look forward to your continued demise, and can''t wait until your doors are finally closed for good.

[timetrips1]

I feel sorry for the workers that will be laid off but not sorry for Ford. They produce *** automobiles and don''t stand behind them when they fall apart. I bought my last new Ford in 1998 and by 2000 swore I''d never buy another Ford. Since then I''ve bought two Honda''s and have not looked back since! You couldn''t pay me to take a Ford.

[talkingham]

Buuuuuiiiiiccccckkkkk.