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Ford slows North American gas-guzzler production, shifts back profit goal
[May 23, 2008]

Ford slows North American gas-guzzler production, shifts back profit goal

(Canadian Press (delayed) Via Acquire Media NewsEdge) DETROIT _ Ford Motor Co. (NYSE:F) Ford Motor Co. is cutting North American production of pickup trucks and sport utility vehicles as car buyers eyeing record gasoline prices turn to more fuel-efficient models.

The automaker also said Thursday it no longer expects to become profitable by next year.

Ford did not specify plant-by-plant impacts but the announcement was positive for Ford of Canada's assembly complex in Oakville, west of Toronto, as management intends to increase production of the crossover vehicles assembled there.

``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,'' stated Ford CEO Alan Mulally.

Dearborn, Mich.-based Ford cut back its projection of total U.S. sales this year to between 15 million and 15.4 million vehicles. That's down from 17 million as recently as 2005.

Ford said it will cut overall production by 15 per cent in the current quarter, then by 15 to 20 per cent in the third quarter and by two to eight per cent in the fourth quarter.

The cuts will primarily affect pickup trucks and sport utility vehicles, whose sales have plunged in recent months amid rising fuel prices and a slumping American home construction market which has undermined demand for working trucks.

However, Ford plans unspecified increases in production of cars and crossovers through additional shifts and overtime.

American sales of the Oakville-made Ford Edge were up 38 per cent in the first four months of this year while sales of large SUVs skidded 29 per cent and Ford's F-series trucks, long the best-selling vehicle in the United States, faded 16 per cent.

The Oakville plant also assembles the Lincoln MKX, a high-end variant of the Edge, and the new Flex, a boxy crossover just coming onstream for which Ford has high hopes.

However, sales have been sluggish of large Crown Victoria sedans made at Ford's other Canadian assembly plant in St. Thomas, Ont.

``I don't think we have anything new to share on the Crown Vic today,'' Ford spokesman Mark Truby said from Dearborn.

Truby added that details on production changes would be made public when Ford releases its second-quarter financial results in July.

Overall, Ford's mix of North American-made vehicles remains heavily tilted to trucks and SUVs. In addition to realigning its manufacturing to produce more small cars and crossovers, the company said it will 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 per cent and confirmed additional cuts at a factory in Michigan earlier this week. But it revealed the deeper extent of the cuts Thursday.

Consumers have been shifting to smaller, more fuel-efficient cars in the last few months at a pace that has stunned the industry. January-April sales of subcompact cars in the U.S. shot up 33 per cent from a year earlier, including 29 per cent for the Ford Focus compact sedan, while overall American vehicle sales slid eight per cent.

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

Copyright ? 2008 The Canadian Press

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