Ford Slashes 4Q Production by 21%; Trucks Bear the Brunt
18 August 2006
Ford Motor Company announced a 21% reduction of North American fourth quarter production—168,000 units—as part of its broader turnaround efforts. The company is also reducing its previously announced third-quarter production plan by 20,000 units.
Truck models will take the largest 4Q cut—155,000 units out of the 168,000, or 92%. For the full year, Ford has cut truck production by 404,000 units compared to 2005, with 278,000 of that (69%) coming in the third and fourth quarters. Production of cars, on the other hand, will increase by a total of 118,000 units in 2006.
According to Ford, the plan reflects expectations for lower industry sales of light trucks and truck-based sport utility vehicles, as high gasoline prices are expected to continue to encourage demand for more fuel-efficient passenger cars and crossovers.
Bill Ford, the company’s chairman and CEO, outlined the decision to cut production in a note to employees, explaining the decision is part of broader efforts to accelerate the company’s North American turnaround and saying full details of additional actions will be announced in September.
Unconfirmed reports are already circulating that Ford will eliminate 6,000 more salaried jobs in the September announcement.
For full-year 2006, Ford now plans to produce 3.048 million vehicles at its North American assembly plants—1.134 million cars and 1.914 million trucks—a 9% reduction from 2005.
The revised 2006 production plan is summarized in the table below:
The new production plan will result in downtime at several assembly plants between now and the end of the year, including: 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).
The following plants are expected to operate on straight time or overtime based on consumer demand: Hermosillo, Mexico (Ford Fusion, Mercury Milan and Lincoln MKZ), AutoAlliance International in Flat Rock, Mich. (Ford Mustang), Oakville, Ontario (Ford Edge, Lincoln MKX and Ford Freestar), Wayne, Mich. (Ford Focus), Kansas City, Mo. (Ford Escape and Mercury Mariner), Ohio Assembly in Avon Lake, Ohio (Ford Econoline) and Atlanta (Ford Taurus).
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In light of shifting consumer trends due to rising gas prices, Ford has decided to cut production of its trucks from 168,000 units to only 13,000 units for the 4th quarter of the year. This also falls in line with their restructuring plan. Via Green Ca... [Read More]