Ford plans to slash its North American output for the rest of this year, with temporary shutdowns at 10 assembly plants, in a dramatic effort to speed up its turnaround plan, reduce inventories and improve the trade-in values of its vehicles.
Ford said the cuts were the deepest made by any North American carmaker in more than two decades. It said fourth-quarter production would tumble by 21 per cent, or 168,000 vehicles, compared to a year ago.
The 103-year-old, family-controlled carmaker has come under fire for not acting as decisively as its rival General Motors to reverse declining fortunes in a ferociously competitive market.
The axe will fall heavily on pick-up trucks and sports-utility vehicles. Ford's F-Series pick-ups make up more than a quarter of its US light-vehicle business and are among its most profitable models. But January-July sales were more than 12 per cent lower than a year earlier.
"They're just too heavily dependent on the F-Series," said Erich Merkle, analyst at consultancy IRN. He ascribed that sales slump mainly to the slowing home construction market. Building contractors are among the vehicles' heaviest users.
Rising fuel prices have hit demand for SUVs, such as Ford's flagship Explorer. Sales are down a third this year in spite of a new model last autumn. The cutbacks are a severe blow to parts suppliers. Shares in Visteon, a former Ford subsidiary, were 3.7 per cent lower at mid-morning yesterday.
Lear, which specialises in interiors, was down almost 7 per cent. Ford shares were 2.6 per cent lower. - (Financial Times service)
