Ford to retool product line, importing european cars

[DomS]

http://money.cnn.com/2008/07/2...postversion=2008072407

NEW YORK (CNNMoney.com) -- Ford Motor Co. announced plans to transform its vehicle lineup and reported a massive second-quarter loss Thursday.

Ford (F, Fortune 500) stock fell about 8% in early trading.

"Because of deteriorating economic conditions, demand has declined dramatically, especially in North America," said Ford CEO Alan Mulally, who also blamed rising gas prices for the decline.

Mulally said the company is working toward reducing its salaried workforce by 15%. The company aims to save $5 billion annually, and has managed to reduce costs by $1 billion so far.

He also said the company is now shifting its focus "to bring to the North American market smaller, more fuel-efficient vehicles that people increasingly want."

The company said it will make big changes to the vehicles it sells domestically - bringing six small cars made in Europe to the North American market.

Ford said that three large truck and sport utility vehicle plants in Wayne, Mich., Louisville, Ky., and Cuautitlan, Mexico would be switched over for the manufacture of small cars. Re-tooling will begin in December, the company said.

In addition to converting the three plants in North America, Ford said it will ramp up production of small utility vehicles at its Kansas City, Mo., assembly plant, including the Ford Escape, Escape Hybrid, Mercury Mariner and Mariner Hybrid.

Mulally said that, in the second quarter, Ford rolled out two new vehicles - the Ford Flex, a "crossover" car-based SUV, and the Lincoln MKS luxury sedan. Mulally said these are the first vehicles with "eco boost" technology, providing better fuel economy.

As production winds down, Ford has been slashing production of SUVs and large trucks to meet the reduced demand, and delayed the launch of its new F-150. But some truck and SUV lines will continue, at least for now.

Ford said it will continue to produce the Ford Ranger through 2011 at its Twin Cities, Minn. plant, which was scheduled to close in 2009. The company also said it would shift production of the Ford Expedition and Lincoln Navigator to its Louisville plant from Wayne, Mich.

Tough quarter Ford said it lost $8.7 billion, or $3.88 per share, in the second quarter, including pre-tax special charges primarily due to the write-down of assets. A year earlier, the automaker announced a profit of $750 million, or 31 cents per share.

Without charges, Ford reported a loss of $1.4 billion, or 62 cents per share, in the latest quarter.

Revenue, excluding special items, fell to $38.6 billion from $44.2 billion a year earlier.

Ford said the special items included $8 billion in write-offs stemming from the loss in value to Ford North American and its Ford Credit lease portfolio. For this, Ford blamed "deteriorating economic conditions."

Ford managed to beat analyst expectations on revenue, but missed on earnings. Analysts expected Ford to report a 14% drop in revenue to $34.6 billion, and a loss of 27 cents per share, without charges, according to consensus compiled by Thomson/First Call.

Hard-hit Ford, like its American rival GM (GM, Fortune 500), has been hard-hit by economic weakness. In particular, rising gas prices have severely hampered consumer interest in big trucks and SUVs. In 2007, Ford lost its place as the No. 2 automaker in the U.S. to the Japanese automaker Toyota (TM).

Ford has been offering buyouts to the hourly employees among its 54,000-strong workforce. But only 4,200 workers accepted, far short of the company's goal. On Monday, Ford said that a new round of buyout and early retirement offers had been made to workers at 17 facilities.

On Wednesday, the rival U.S. automaker Chrysler also announced that it was cutting 1,000 salaried jobs.

Ford's stock has fallen 10% so far this year. But it still managed to outperform the S&P, which has dropped 12%.

well, it's not like they can do WORSE....

 

[BassBomb]

Personally I wouldn't mind if we went to JPN or EUR style for cars, where the majority are small 4cyl cars, hatches, vans

That was the first thing that shocked me when i went to UK in 2001...

But over here the dream is bigger and better bigger and better!

 

[HannibalX]

I think we will see the Escape and Explorer stick around because R&D for those products is paid for long ago. My bet is the Edge and Flex go away, along with the Expedition and most of the classed up F150 and F250 models.

It would be nice to have a diesel option for the Focus and the Fusion. I would be all over a 5-speed, diesel powered Fusion.

 

[PricklyPete]

Originally posted by: BassBomb

But over here the dream is bigger and better bigger and better!

Which is short sighted and stupid. I'm glad perception is changing....but I do not have full faith that it will stay this way. Remember the fuel crisis of the 70's when everyone first started buying up Datsuns and Toyotas....that didn't last long. Sure we switched from monstrous cars to monstrous trucks/SUVs...but the American perception lived on. Hopefully this time it will be a bit more permanent.

 

[PricklyPete]

Originally posted by: Pale Rider
I think we will see the Escape and Explorer stick around because R&D for those products is paid for long ago. My bet is the Edge and Flex go away, along with the Expedition and most of the classed up F150 and F250 models.

It would be nice to have a diesel option for the Focus and the Fusion. I would be all over a 5-speed, diesel powered Fusion.

Huh? The R&D for all of those cars is already paid for. The Explorer will go away along with the Expedition and such. The Edge and the Flex are the larger cars that people are still buying these days. They'll be sticking around (well at least the Edge...if the Flex styling doesn't catch on...it's days could be numbered). The Escape will stick around because it is also still selling and it is their only "all-important" hybrid offering at the moment.

 

[Arkaign]

Ford is selling every Focus that they can churn out, and are prepping for global MK3 Focus in 2011 (2012 model) IIRC. The new Festiva should also be a feather in the cap.

 

[desy]

My Aunt and Uncle who live in Denmark would LOVE a larger vehicle.
They can't afford them because gasoline is too high, Europe doesn't have large cars because they don't want them.

 

[HannibalX]

Originally posted by: PricklyPete

Originally posted by: Pale Rider
I think we will see the Escape and Explorer stick around because R&D for those products is paid for long ago. My bet is the Edge and Flex go away, along with the Expedition and most of the classed up F150 and F250 models.

It would be nice to have a diesel option for the Focus and the Fusion. I would be all over a 5-speed, diesel powered Fusion.

Huh? The R&D for all of those cars is already paid for. The Explorer will go away along with the Expedition and such. The Edge and the Flex are the larger cars that people are still buying these days. They'll be sticking around (well at least the Edge...if the Flex styling doesn't catch on...it's days could be numbered). The Escape will stick around because it is also still selling and it is their only "all-important" hybrid offering at the moment.

Don't count on it. Explorer has been the number one selling SUV in America for a long time and for good reason.

As far as R&D is concerned. The Flex is a brand new vehicle and so is the Edge. It will take Ford close to five years to recoup costs on those vehicles.

 

[MiataNC]

The company said it will make big changes to the vehicles it sells domestically - bringing six small cars made in Europe to the North American market.

About damn time!

They should have made this move 5 years ago.

 

[iamwiz82]

Originally posted by: desy
My Aunt and Uncle who live in Denmark would LOVE a larger vehicle.
They can't afford them because gasoline is too high, Europe doesn't have large cars because they don't want them.

And in the US we have to drive more. Public transportation just cannot cope with such a spread out society.

 

[DivideBYZero]

Originally posted by: desy
My Aunt and Uncle who live in Denmark would LOVE a larger vehicle.
They can't afford them because gasoline is too high, Europe doesn't have large cars because they don't want them.

That is more related to the HUGE purchase tax on luxury cars in Denmark.

Denmark != Europe.

 

[desy]

Gas was one reason
parking is another, taxes are another and so on.
Point is a lot of europe for EG the UK where they don't allow cars in London to reduce congestion unless you have a micro-car
They would easily choose large cars if they had the same conditions as North America

 

[QurazyQuisp]

I'm just excited that the euro focus is coming here in 2010! I just hope that we will get the RS spec at some point. Talk about a killer hatch.

 

[HannibalX]

We already have the "Euro" Focus here in the states. It's called the Mazda3 (and the Volvo S40 too).

 

[mooseracing]

Originally posted by: Pale Rider


It would be nice to have a diesel option for the Focus and the Fusion. I would be all over a 5-speed, diesel powered Fusion.

Too bad the rest of America doesn't want diesels...main reason the Jeep liberty diesel died quickly among others.

America sees diesels as sooty and dirty. They don't understand the truth.

 

[HannibalX]

Originally posted by: mooseracing

Originally posted by: Pale Rider


It would be nice to have a diesel option for the Focus and the Fusion. I would be all over a 5-speed, diesel powered Fusion.

Too bad the rest of America doesn't want diesels...main reason the Jeep liberty diesel died quickly among others.

America sees diesels as sooty and dirty. They don't understand the truth.

Yup. Americans love their 40 mpg hybrids. Forget the fact that there are simple, reliable and clean diesels in Europe that get 75 mpg without any added complexity to the design, manufacture or price of the car.

For shame.

 

[Atrail]

Originally posted by: Pale Rider
We already have the "Euro" Focus here in the states. It's called the Mazda3 (and the Volvo S40 too).

S40 is an I-5
Is the Euro focus 5 cycl?

 

[ElFenix]

Originally posted by: Pale Rider

Don't count on it. Explorer has been the number one selling SUV in America for a long time and for good reason.

As far as R&D is concerned. The Flex is a brand new vehicle and so is the Edge. It will take Ford close to five years to recoup costs on those vehicles.

explorer was outsold by the cr-v, the escape, and probably the rav4 last year.

 

[lurk3r]

Originally posted by: MiataNC

The company said it will make big changes to the vehicles it sells domestically - bringing six small cars made in Europe to the North American market.

About damn time!

They should have made this move 5 years ago.

No doubt, I had a Mondeo on a track when I was in England, the car retailed for $15k GBP, around $30K USD at the time. there was plenty of room for me, the abs system did not get in the way, and it was very well powered for the type of car. The kicker was it was a diesel that got the better side of 40mpg.

The Mondeo actually prompted me to test drive NA's closest equivalent, the Contour. I didn't even make it around the block. The only car I've ever driven thats worse is the Mailbu.


If we had access to the Mondeo in our market I would have had it in a heartbeat over my Altima, and I am a confirmed Ford hater.

 

[nakedfrog]

Can I have a small, fuel efficient station wagon that will seat seven?

 

[kalrith]

Originally posted by: ElFenix

Originally posted by: Pale Rider

Don't count on it. Explorer has been the number one selling SUV in America for a long time and for good reason.

As far as R&D is concerned. The Flex is a brand new vehicle and so is the Edge. It will take Ford close to five years to recoup costs on those vehicles.

explorer was outsold by the cr-v, the escape, and probably the rav4 last year.

You're right. The Explorer was no. 4 last year: http://www.bloomberg.com/apps/...g&refer=transportation.

 

[LS8]

Originally posted by: kalrith

Originally posted by: ElFenix

Originally posted by: Pale Rider

Don't count on it. Explorer has been the number one selling SUV in America for a long time and for good reason.

As far as R&D is concerned. The Flex is a brand new vehicle and so is the Edge. It will take Ford close to five years to recoup costs on those vehicles.

explorer was outsold by the cr-v, the escape, and probably the rav4 last year.

You're right. The Explorer was no. 4 last year: http://www.bloomberg.com/apps/...g&refer=transportation.

From the link.

Sales of the CR-V, developed from the frame of Honda cars, are rising as near-record U.S. gasoline prices and shifting consumer tastes have damped demand for bigger, truck-based SUVS. Most notable among them is Ford Motor Co.'s Explorer, which had been the best-selling SUV in the U.S. for most of the past 15 years. This year, it's No. 4.

 

[QurazyQuisp]

Originally posted by: Pale Rider
We already have the "Euro" Focus here in the states. It's called the Mazda3 (and the Volvo S40 too).

I like the looks of the Euro Focus. So while we may have two cars that are built on the same platform, we do not have the same actual car.

 

[exdeath]

Originally posted by: PricklyPete

Originally posted by: BassBomb

But over here the dream is bigger and better bigger and better!

Which is short sighted and stupid. I'm glad perception is changing....but I do not have full faith that it will stay this way. Remember the fuel crisis of the 70's when everyone first started buying up Datsuns and Toyotas....that didn't last long. Sure we switched from monstrous cars to monstrous trucks/SUVs...but the American perception lived on. Hopefully this time it will be a bit more permanent.

Why do you care how other people live?

 

[DrMrLordX]

Not to be a stick-in-the-mud, but moving passenger cars to diesel is not the right move given the current fuel situation in the United States. Diesel is already nearing $5/gallon. If you move a significant portion of the American passenger cars onto diesel, where do you think the price is going to go?

If refineries could be retooled to produce less unleaded and more diesel then so be it, but with our current refinery output levels, moving anything else to diesel seems like economic suicide (and it'll put a real pinch on already-suffering truck fleets, bus fleets, and so forth).