Ford Motor Company on Thursday said it is cutting production of large trucks and sport utility vehicles as soaring pump prices drive US demand for more fuel-efficient cars.
The second-largest US automaker also said it no longer anticipates returning to profitability next year.
Ford said it lowered its near-term profit outlook for North America “to respond to the rapidly changing business environment in the US” amid the worst housing crisis in decades and surging commodity prices.
“Unless there is a fairly rapid turnaround in US 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 president and chief executive Alan Mulally said in a statement.
“Overall, we expect to be about break-even companywide in 2009 — with continued strong results in Europe and South America,” Mulally said.
The struggling automaker said it is on track to cut its North American operating costs by about US$5 billion annually by the end of this year.
Ford has been wrestling with a vast restructuring and cost-cutting program since 2006, when it had a record annual net loss of US$12.6 billion.
Last month it posted a first-quarter profit of US$100 million in a surprise turnaround from a net loss of US$2.7 billion last year.
Ford said that this year’s production of large trucks and sport utility vehicles (SUVs) will be reduced from a year ago “as gas prices soar and customers move more quickly to smaller and more fuel-efficient cars and crossovers.”
The product mix shift toward higher production of cars and crossovers — lighter SUVs built on platforms of cars instead of trucks — will occur in the second half of this year, the Dearborn, Michigan-based automaker said.
Ford said it now plans to produce 690,000 vehicles in North America during the second quarter, down 20,000 from its prior production outlook and 15 percent below its year-ago level.
The company plans to reduce third-quarter production by 15 percent to 20 percent from a year earlier and fourth-quarter output by 2 percent to 8 percent.
“Rapidly rising commodity prices — particularly steel prices — and higher gasoline prices that are accelerating consumers’ shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009,” said Mark Fields, Ford’s president of The Americas.
Standard & Poor’s Ratings Services revised its outlook on Ford to negative from stable, citing “heightened concerns about industry challenges in North America” after Ford said it no longer expects to return the automotive business to profitability by next year.
Shares in Ford skidded 8.2 percent to close at US$7.16 in New York.
Separately, Ford said that its board of directors is “neutral” with respect to a tender offer from Tracinda Corp, the personal holding company of billionaire tycoon Kirk Kerkorian.
On April 28, Tracinda bid US$8.50 per share for 20 million common shares of the automaker, representing a 38.7 percent premium to the stock’s April 2 price. The offer expires on June 9.
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
EYES AT SEA: Many marine enthusiasts have expressed interest in volunteering for coastal patrols, which would help identify stowaways and illegal fishing, the CGA said Six thousand coastal patrol volunteers are to be recruited for 159 inspection offices to enhance the nation’s response to “gray zone” conflicts, Coast Guard Administration (CGA) sources said yesterday. Volunteer teams would be established to increase the resilience of coastal defense systems in the wake of two unlawful entries attempted by Chinese over the past three months, Ocean Affairs Council Minister Kuan Bi-ling (管碧玲) said. A former Chinese navy captain drove a motorboat into the Tamsui River (淡水河) in Taipei on the eve of the Dragon Boat Festival in June, while another Chinese man sailed in a rubber boat into the Houkeng
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
‘ANONYMOUS 64’: A national security official said that it is an attempt by China to increase domestic anti-Taiwanese sentiment and inflame cross-strait tensions The Ministry of National Defense’s (MND) Information, Communications and Electronic Force Command (ICEFCOM) yesterday denied accusations by China that it had undermined regional security by carrying out cyberattacks against targets in China, adding instead that Beijing was responsible for raising tensions and undermining regional peace. The Chinese Ministry of State Security on WeChat accused a hacker group called “Anonymous 64” of targeting China, Hong Kong and Macau starting earlier this year through frequent cyberattacks. The group carried out cyberattacks to seize control of Web sites, outdoor electronic billboards and video-on-demand platforms in China, Hong Kong and Macau, it said, adding the hackers’