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Ford To Cut Production By 21%, Close Plants

Ford Motor Co. said Aug. 18 it would slash its fourth-quarter U..S vehicle production by 21% or 168,000 units as it vies to find dramatic cost savings. Ford said the move to cut output across its production lines would see a 9% reduction of its full-year 2006 output compared with 2005.

The production cuts will result in downtime at several assembly plants including the Michigan truck plant at Wayne, which builds the Ford Expedition and luxury Lincoln Navigator SUVs. Output will also be trimmed at Ford's Louisville plant in Kentucky, which produces the Ford Explorer and Mercury Mountaineer SUVs. Other affected plants are located in Ontario (Canada), Chicago, Michigan, Minnesota, Kansas and Virginia.

Ford expects its revised production plans to "sharply reduce" the supply of several models while also lessening the pressure on dealers carrying large car and truck inventories.

Ford said its output cuts were due in part to an expected drop in demand for gas-guzzling light trucks and sport utility vehicles (SUVs). "High gasoline prices are expected to continue to encourage demand for more fuel-efficient passenger cars and crossovers," the company said

"We know this decision will have a dramatic impact on our employees, as well as our suppliers," company chief executive Bill Ford said in a statement. "This is, however, the right call for our customers, our dealers and our long-term future," he said.

Ford made the announcement two weeks after revising its second-quarter loss for the quarter ended June to $254 million, more than double its initial estimate, blaming it on soaring pension costs.

Copyright Agence France-Presse, 2006

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