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Old 08-18-2006, 11:59 AM   #1
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BREAKING: Ford slashes production

As part of its accelerated "Way Forward" turnaround strategy, Ford Motor announced today that it will cut North American production by 21 percent (168,000 vehicles) in the fourth quarter of this year. Third quarter production will by cut by 20,000 units.

The result will be a 9 percent reduction in 2006 vehicle production compared to 2005 levels.

In an announcemento employees, Chairman and CEO Bill Ford said the decision is part of the company's recently accelerated North American turnaround plan, going on to say that additional actions will be announced in September.

The resulting reduced supply of vehicles will help dealers control inventory carrying costs and reduce the need for sales incentives to move slow-selling models. 2006 production in the first two quarters of the year was already 40,000 units under 2005 levels, due to cuts in truck production levels.

The announcement will mean downtime at plants producing the slower-selling vehicles affected by the plan. Plants and vehicles targeted include: St. Thomas, Ontario (Ford Crown Victoria and Mercury Grand Marquis), Chicago (Ford Five Hundred and Freestyle and Mercury Montego), Wixom, Mich. (Lincoln Town Car), Louisville, Ky. (Ford Explorer and Mercury Mountaineer), Michigan Truck in Wayne, Mich. (Ford Expedition and Lincoln Navigator), Twin Cities, Minn. (Ford Ranger) and all F-Series truck plants (Kansas City, Mo.; Norfolk, Va., Dearborn and Kentucky Truck in Louisville).

[Source: Ford]


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Old 08-18-2006, 12:06 PM   #2
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Translation - Ford is slowly catching on to the fact that nobody wants as many of these products as they've been building. It's better than Chrysler's "let's flood the dealers with product that they don't want or didn't order" plan. We've seen how well that's working out.

This is a step in the right direction for Ford. Does it suck for the people who work at those plants - not really because they are still being paid, except that they aren't required to go to work now. (wish my job was like that). Ford is going to lose money either way, this is less likely to create a loss for them. Maybe when Ford and GM file Chapter 11, they won't be in a situation where they are still paying folks who aren't presently working.
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Old 08-18-2006, 12:11 PM   #3
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Hopefully this will make Ford more competitive in the long run. Sure slashing prices in the beginning and offering 0% interest, employee pricing, etc etc is great, but hopefully this will slow the apalling rate of depreciation. Maybe...
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Old 08-18-2006, 12:42 PM   #4
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Hmmm, so it seems that Ford is finally beginning to realize that there is a concept called "supply and demand". You only build as many cars as you can sell. You can't stuff the cars down people's throat.
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Old 08-18-2006, 02:10 PM   #5
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good on ya ford for realizing that making more than your market share is gonna lead to disaster
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Old 08-18-2006, 02:25 PM   #6
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Notice Focus production is not affected...

With gas prices so high, I'm not surprised.
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