Ford Slashes Forecast, Cuts Production by 25%
Ford Motor on Friday said it's going to have trouble breaking even by 2009 and slashed third-quarter production by 25 percent.
The Detroit auto maker also said it will delay the launch of the new model its top-selling F-150 pickup truck by two months.
Ford lowered its forecast for U.S. industry auto sales for 2008 to between 14.7 million and 15.2 million units, including medium and heavy-duty trucks, from its previous outlook of 15 million to 15.4 million.
The company said automotive results this year would be worse than 2007's and it would be "difficult" for the U.S. auto maker to break even in 2009 because of a deepening slump in U.S. sales.
Due to the tough sales conditions, Ford said it will cut third-quarter production by another 50,000 vehicles, or 25 percent. It now plans to produce 475,000 vehicles. The company also says fourth-quarter production will drop 8 to 14 percent compared with the same quarter last year.
"As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industrywide auto sales slowing further, and demand for large trucks and SUVs at one of the lowest levels in decades,'' Ford Chief Executive Alan Mulally said in a statement.
Ford delayed the launch of the new model of its F-150 pickup truck as it tries to work through inventory of the current model. The company now expects the 2009 model to go on sale in late fall.
The forecast for continued losses marks the first significant setback for Ford since Mulally took over as chief executive in 2006.
Both Ford and General Motorshave announced plans to shift more of a focus toward cars from trucks and develop hybrid cars amid blazing demand for energy-efficient vehicles but they're struggling to keep up with foreign rivals like Toyota Motor that are way ahead of them.
Ford shares are down 25 percent since their May peak around $8.50; GM shares have plunged 50 percent from a February high near $30 a share.
In Friday's action, Ford was off about 6 percent and GM was down 4 percent.
-- Reuters and the Associated Press contributed to this article.