Dearborn, Michigan – Ford has announced that it will increase North American car production and reduce truck and SUV production for the remainder of 2008, to reflect the current change in customer buying preferences. It is also planning further manufacturing capacity realignments, additional cost reductions, and changes to its product mix.
The company said it is increasing production of the Ford Focus, Fusion, Edge and Escape, the Lincoln MKZ and MKX, and for U.S. sales, the Mercury Milan and Mariner, while reducing production of large trucks and SUVs. It now plans to produce 690,000 vehicles in North America during the second quarter, a further reduction of 20,000 from previously-announced planned production levels, and a decline of 15 per cent from the second quarter of 2007. Third-quarter production levels are planned at between 510,000 and 540,000 units, down 15 and 20 per cent from the same period last year, while fourth-quarter production is expected to be between 590,000 and 630,000 units, down two to eight per cent from 2007.
“We are continuing to make great progress on our plan,” said Alan Mulally, Ford president and CEO. “We are profitable and growing outside of North America, and our transformation plan in North America is working. The challenge affecting the entire industry is the accelerating shift in consumer demand away from large trucks and SUVs to smaller cars and crossovers, combined with a steep rise in commodity prices and the weak U.S. economy.”
The second-half production plan includes higher car and crossover production when compared to a year ago, and will be achieved through overtime and added shifts at those plants. Reductions in large truck and SUV production will be achieved through a combination of additional downtime, shift reductions and line-speed actions.
The production changes have also forced a change in Ford’s near-term financial outlook. “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,” Mulally said. “Overall, we expect to be about break-even company-wide in 2009, with continued strong results in Europe and South America. The most important thing we can do right now is to continue to take decisive action implementing our plan to respond to the rapidly changing business environment.”