Ford cutting production as gasoline prices climb
Ford 3-month NYSE chart
Ford Motor Co. said Thursday it is cutting North American production of its large trucks and sport utility vehicles in the face of rising gasoline prices and the weak U.S. economy.
Ford said it now plans to build about 690,000 vehicles in North America during the current quarter, a drop of 20,000 from previous forecasts. Third quarter production is expected to drop 15 per cent to 20 per cent to a range between 510,000 and 540,000, while fourth quarter production is expected to be between 590,000 and 630,000, a drop of two to eight per cent from the same quarter of last year.
Canadian Auto Workers union president Buzz Hargrove warned that the cutbacks could result in 300 workers losing their jobs at Ford's engine plant in Windsor, Ont.
"We're told by Ford we'll probably lose a shift in the Windsor engine facility that builds V-8s for the SUVs and half-ton trucks, so that will be about 300 people will be laid off," Hargrove said.
While it cuts production of its larger vehicles, Ford said it will bump up output of its cars.
"Rapidly rising commodity prices — particularly steel prices — and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009," said Mark Fields, Ford's president of the Americas.
Ford CEO Alan Mulally said it will now take longer to get its money-losing North American operations back to profitability unless there is a fairly rapid turnaround in U.S. business conditions, which he said the company is not expecting.
"Overall, we expect to be about break-even companywide in 2009 — with continued strong results in Europe and South America," Mulally said.
Shares of Ford traded down 59 cents at $7.21 US on the NYSE in the wake of the announcement.
In Canada, Ford produces the Crown Victoria large sedan at its St. Thomas, Ont., assembly plant, while its Oakville, Ont., plant builds the Edge crossover models.
With files from the Canadian Press
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