Ford cutting U.S. output, expects to break even in 2009

Posted Thu May 22 2008 9:05 AM by Siddharth Raja

Ford has announced today that it will cut its North American production for the rest of the year as high fuel prices and falling demand for its trucks and SUVs continue to hurt sales. In a second statement, Ford also conceded that it will run at a loss this year but expects to break only even at the end of 2009 instead of reaching profitability.

For the remaining year production will be cut 15% this quarter, between 15 and 20% in the third quarter, and between 2 and 8% in the fourth. The cuts will affect its pickup truck and SUV models, however, production volumes for cars and crossovers will increase in the coming year.

Falling sales isn’t the only negative impact on Ford’s bottom line. The carmaker’s profits are also being hit by high commodity prices and increased development costs for more fuel-efficient vehicles to meet upcoming CAFE fuel-economy regulations, reports The Detroit News.

“Unless there is a fairly rapid turnaround in U.S. business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American Automotive profitability goal,” Ford CEO Alan Mulally said in the statement. “Overall, we expect to be about break-even companywide in 2009 – with continued strong results in Europe and South America.”

Reader Comments

Thu May 22 2008 9:25 AM
chris says

I'm kind of glad that they're citing CAFE as a source of increased development. Really does give you the impression that the guys at ford are really planning for 5 and 10 years into the future,.. and not just reaching that profitability marker. its not just about profitability, but sustained profitability.

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