Ford Starts To Decrease Production Rate

Anthony Fontanelle
May 27, 2008

It was confirmed that the all-American automaker is generating some amendments to its production plan. Ford Motor Company is said to be improving downward near-term North American Automotive profit points of view as well. In addition to this, other cost cutbacks and alteration to its product blend to answer to the fast changing business setting in the U.S. while planning some extra manufacturing capability realignments.

Furthermore, Ford said it is growing 2008 North American production of the best-selling Ford Escape, Edge, Focus and Fusion, Mercury Milan and Mariner, along with the Lincoln MKZ and Lincoln MKX. Ford is decreasing 2008 production of large trucks with great quality truck parts and SUVs at the same time. The main reason is because the gas prices soar endlessly and customers shift faster to smaller and more fuel-efficient cars and crossovers rather than large trucks with sturdy truck parts.

"We are continuing to make great progress on our plan. 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," says Ford President and CEO Alan Mulally.

According to Ford, they are planning right now to produce 690,000 vehicles in North America during the second quarter. This will mark a slight reduction of 20,000 units compared from the earlier declared scheme production levels. It will also cost a decline of 15 percent from the second quarter of 2007. Down 15 to 20 percent from the same period last year, Ford Motor Company also plans to manufacture between 510,000 and 540,000 units in the third quarter. Fourth-quarter production is likely to fall between 590,000 and 630,000 units; a decrease of 2 to 8 percent from year-ago ranks.

"Rapidly rising commodity prices -- particularly steel prices -- and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009," says Mark Fields, Ford's President of The Americas.

"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. Overall, we expect to be about break-even companywide in 2009 -- with continued strong results in Europe and South America," added Mulally.

Source:  Amazines.com