Ford will slash its North American production by as much as 12% for the first six months of next year, but hopes to bounce back in the second half. Ford’s CFO Don Leclair told Automotive News that the company would cut vehicle production by 8 to 12% next year, and will raise inventory levels later on inline with consumer demand. Last week’s dismal $5.8 billion third-quarter result has forced Ford into review mode and the cut had to come to its domestic operations, which accounts for the bulk of the company’s financial woes. More troubling is that the fourth quarter results are expected to be even worse over the next 12 months.

Leclair added that production numbers for the second half of 2007 will only drop by 10%, coinciding with the launch of several new products, and like most industry shake-ups, changes will be slow to take effect. CEO Alan Mulally told reporters "with the inventories coming down, it takes a little bit of time for our cost-reduction efforts to kick in." The bulk of the cuts will result from the demise of the Ford Taurus sedan with the rest coming mainly coming from Ford’s pickup and SUV range. This year, trucks have accounted for 61% of Ford’s total production, down from the highs of 68% two and a half years ago.

Despite all the cutbacks, Ford's North American division will continue to lose money though 2007 and 2008 as well. However, Leclair added that we should start to see improvements by as early as next fall.