Ford delays 2009 F-150 release by two months
This is scary stuff.
From Automotive News:
Ford delays 2009 F-150 release by two months
More production cuts announced, profit outlook dims
June 20, 2008 - 10:40 am ET
UPDATED: 6/20/08 12:13 p.m. EDT
DETROIT -- Ford Motor Co. said today it will delay the introduction of the 2009 Ford F-150 and make deeper cuts to North American truck production plans as industry sales worsen.
The 2009 F-150 will be delayed by two months because of the need to sell down inventory of the current model, Ford said. The revamped model now will go on sale in late fall. One of two F-150 plants will be idled for most of the third quarter. Both F-150 plants will lose one shift of production.
"As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industrywide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades," Ford CEO Alan Mulally said in a statement. "Ford has taken decisive action to respond to this accelerating shift in customer demand away from large trucks and SUVs to smaller cars and crossovers, and we will continue to act swiftly moving forward."
Ford now plans for industry light-vehicle sales to range from 14.4 million to 14.9 million in 2008.
Ford cut its third-quarter production plan by 50,000 vehicles. It now plans to produce 475,000 vehicles in the third quarter, a 25 percent cut from the same period in 2007. In the fourth quarter, Ford now plans to produce 550,000 to 590,000 vehicles. That's a 40,000-unit reduction from previously announced plans and a decline of 8 to 14 percent compared with 2007.
Ford also warned today that 2008 pretax automotive results will be worse than in 2007. Cash outflows to fund operating losses and restructuring will be greater than previous guidance. And unless the economy improves, it will be difficult for Ford to break even companywide on a pretax basis in 2009, excluding special items, the company said.
In North America, Ford expects it still will meet its goal of cutting annual operating costs by $5 billion compared with 2005.
Ford Motor Credit Co. is now expected to post a pretax loss in 2008 because of plunging large pickup and SUV auction values. Ford Credit no longer plans to make a distribution payment to the parent company this year.
Ford said it will provide more details on changes to its restructuring plan when it announces second-quarter financial results in July.
Ford is taking the following production actions:
• Production of the 2009 F-150 now will begin in August at Ford's Kansas City, Mo., plant and in September at its Dearborn, Mich., plant. The Dearborn plant previously was scheduled to launch the revised truck in July. Ford is cutting one shift at each plant, from two to one at Kansas City and from three to two at Dearborn. Dearborn Truck will be idled most of the third quarter.
• The Michigan Truck Plant in Wayne, Mich., will be idled for nine straight weeks beginning the week of June 23. The cut reflects falling demand of the Ford Expedition and Lincoln Navigator full-sized SUVs.
• One shift of production will be eliminated in the third quarter at a plant in Louisville, Ky., that makes the Ford Explorer and Mercury Mountaineer mid-sized SUVs.
• Line speed will be reduced in the third quarter at another plant in Louisville that makes large F-series Super Duty pickups.
• Line speed will be reduced in the third quarter at a plant in Chicago that makes the Ford Taurus, Mercury Sable and Lincoln MKS large sedans and the Taurus X crossover.
• Production at an assembly plant in Cuautitlan, Mexico, will wind down by the end of 2008. The plant, which now produces large pickups, will be retooled for production of the new Fiesta small car beginning in early 2010.
Ford also said it is making the following moves to increase capacity in the third quarter:
• A plant in Oakville, Ontario, will add a third shift for production of the Ford Edge, Lincoln MKX and 2009 Ford Flex crossovers.
• The Kansas City plant will add a third shift to the line that assembles the Ford Escape and Mercury Mariner crossovers.
• The body and paint shops at the Ford Focus assembly plant in Wayne, Mich., will add a third shift. Line speed will be increased for final assembly of the Focus.
Ford said that production at Ford's stamping, engine and transmission plants is being adjusted to reflect the changes in assembly capacity. Some of the production actions detailed by Ford today had been announced previously.
Ford said today that the next-generation Ford Focus compact will be based on the European Focus and will go into production in North America in late 2010.
The company said it plans sedan and five-door hatchback models of the 2011 Focus. It did not say where or in how many plants that Focus would be produced.
The next-generation Focus will arrive just three years after a re-engineered and restyled model went on sale in 2007. But Ford has been planning that quick replacement for a long time, according to suppliers and industry analysts familiar with Ford's product plans. It wasn't a reaction to $4-a-gallon gasoline.
It will give Ford a global Focus, largely common with models sold in Europe, South America and Asia. Ford said today that the global Focus will have "excellent" fuel economy, achieved through new direct-injection engine technology and a new six-speed transmission.
Mulally said Ford remains committed to bring more small cars to the United States.
"We view the move to smaller, more fuel-efficient vehicles as permanent, and we are responding to customer demand," Mulally said in today's statement. "For the long term, we are moving fast to introduce more small cars, crossovers and fuel-efficient powertrains -- including more hybrids -- and we will adjust our manufacturing facilities to match our updated product lineup."
The next Focus will join sedan and hatchback versions of the Ford Fiesta subcompact, which will be built at the Cuautitlan, Mexico, plant. The European-developed Fiesta will go on sale in early 2010 in North America.