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Thread: Ford announces major production cuts, plant closings....

  1. #1
    Vulture of The Western World Eric's Avatar
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    Ford announces major production cuts, plant closings....

    Ford Motor Co. on Friday announced sharp cuts in its 2006 North American production that will force it to temporarily shut down plants in the U.S. and Canada as it struggles to boost profits against intense foreign competition.

    The company said fourth-quarter production would be down 21 percent, or 168,000 units, from last year. Third-quarter production will be 20,000 units below what was previously announced and 78,000 units below last year.

    For the full year, Ford plans to produce about 9 percent fewer vehicles than last year for a total of just above 3 million.

    "We know this decision will have a dramatic impact on our employees, as well as our suppliers," Chairman and Chief Executive Bill Ford said in a note to employees. "This is, however, the right call for our customers, our dealers and our long-term future."

    He said it was the company's biggest North American production cut in more than 20 years.

    In response to the announcement, Fitch Ratings downgraded Ford's debt further into junk status, while two other ratings agencies placed the company on review.

    Dearborn-based Ford, which lost $254 million in the second quarter, vowed last month to speed up its North American restructuring.

    Bill Ford told employees the cuts are part of that acceleration and said details of more actions will be announced in September.

    The nation's second-largest automaker, which has been losing market share to Asian manufacturers for a decade, said the cuts are an effort to match inventories to demand and avoid costly incentives. The plan also reflects reduced expectations for big trucks and sport utility vehicles considering high gas prices, the company said.

    The new plan will result in temporary halts in production this year at assembly plants in St. Thomas, Ontario; Chicago; Wixom, Mich.; Louisville, Ky.; Wayne, Mich.; St. Paul, Minn.; Kansas City, Mo.; Norfolk, Va.; and Dearborn, Mich.; Ford said.

    Mark Fields, Ford's president of the Americas, said the plan reflects the need "to match production and inventories with consumer demand."

    "In doing so, we'll reduce incentive spending and inventory carrying costs for our dealers ? with the intent to improve residual values for our customers and stabilize operating patterns for our plants and our suppliers," he said in a statement.

    The Wall Street Journal, citing unidentified sources, reported Friday that Ford is considering shutting down more factories and cutting salaried jobs and benefits by 10 percent to 30 percent.

    Ford spokesman Oscar Suris declined to comment on the report.

    Company officials would not say what specific impact the production cuts would have on workers. In general, hourly workers placed on temporary layoff receive 95 percent of their wages through state unemployment benefits and a supplement by Ford.

    The United Auto Workers had no immediate comment on the announcement.

    Meanwhile, Fitch downgraded Ford and its finance arm Ford Motor Credit Co. to "B" from "B+" and lowered its senior unsecured debt to "B+" from "BB-."

    "Implicit in the production cutbacks are expectations of continued weak pickup sales that have resulted in extended inventories," the agency said. "Volume declines in Ford's pickup segment, along with continued declines in mid-size and large SUVs, are likely to accelerate revenue declines and negative cash flows in 2006."

    Standard & Poor's Ratings Services and Moody's Investors Service both put Ford's credit ratings on review for possible downgrades further into junk territory.

    Bank of America analyst Ron Tadross said the cuts are a sign that "Ford is getting more realistic about its share trajectory."

    He said he would not rule out similar cuts at rival General Motors Corp., which is in the midst of its own restructuring.

    Ford shares fell 19 cents, or 2.3 percent, to $7.98, in early afternoon trading on the New York Stock Exchange.

  2. #2
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    Re: Ford announces major production cuts, plant closings....

    Bad news temporarily, good news over the long term.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

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    Vulture of The Western World Eric's Avatar
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    Re: Ford announces major production cuts, plant closings....

    Quote Originally Posted by chiph
    Bad news temporarily, good news over the long term.

    Chip H.
    Probably - and hopefully....

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    Senior Member Kwozzie1's Avatar
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    Re: Ford announces major production cuts, plant closings....

    Ford and GM-Holden are on tenterhooks here after the collapse of a major nut and bolt supplier to the car industry

    http://www.abc.net.au/news/newsitems...8/s1718991.htm
    Rex
    On the Sunshine Coast, in the Sunshine State Queensland (QLD), Australia

  5. #5
    Vulture of The Western World Eric's Avatar
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    Re: Ford announces major production cuts, plant closings....

    Quote Originally Posted by Kwozzie1
    Ford and GM-Holden are on tenterhooks here after the collapse of a major nut and bolt supplier to the car industry

    http://www.abc.net.au/news/newsitems...8/s1718991.htm
    Just wait if there's even a light economic downturn - and gas gets to $4 per gallon... that'll be lights out for sure...

  6. #6
    Senior Member Kwozzie1's Avatar
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    Re: Ford announces major production cuts, plant closings....

    Just wait if there's even a light economic downturn - and gas gets to $4 per gallon... that'll be lights out for sure...

    We are paying aruound AUD 127cents USD96.5cents per litre at the moment

    Rex
    Rex
    On the Sunshine Coast, in the Sunshine State Queensland (QLD), Australia

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