Ford Reduces North American Vehicle Production as Part of the Accelerated 'Way Forward' Turnaround

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Ford Motor Company announced an aggressive reduction of North American production as part of its broader efforts to accelerate the pace of its Way Forward turnaround.

The company said it is reducing North American fourth-quarter production by 21 percent – or 168,000 units – compared with the fourth quarter a year ago. The revised plan also reduces the company's previously announced third-quarter plan by 20,000 units.

Bill Ford, the company's chairman and CEO, outlined the decision to cut production in a note to employees, explaining the decision is part of broader efforts to accelerate the company's North American turnaround and saying full details of additional actions will be announced in September.

For full-year 2006, Ford now plans to produce 3.048 million vehicles at its North American assembly plants – 1.134 million cars and 1.914 million trucks – a 9 percent reduction from 2005.

The revised production plan is expected to sharply reduce the supply of several models and reduce pressure on sales incentives and dealer inventory carrying costs. The plan also reflects expectations for lower industry sales of light trucks and truck-based sport utility vehicles, as high gasoline prices are expected to continue to encourage demand for more fuel-efficient passenger cars and crossovers.

Mark Fields, executive vice president and Ford's president of The Americas, said the "tough-but-important" reduction in production plans underscores the seriousness with which the company is approaching its North American turnaround.

August 18, 2006,

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