Sales of the F-series at Dave Sinclair Ford, his St. Louis dealership, dropped by about one-third during the first five months of 2008. Sinclair has 150 pickups on his lot or on their way.
"The guy who picks up our trash knew that was going to happen," Sinclair said of Ford's announcement last Friday. "We all love the '09 truck, but nobody's nutty enough to put '09s in until we start crashing through this inventory of '08s."
As of June 1, Ford had 226,000 F-series pickups in stock at dealerships, a 142-day supply. Company executives say the backlog caused the delay of the 2009 model. The re-engineered and restyled F-150 is now scheduled to go on sale in late fall.
Ford also announced Friday that it would eliminate two shifts of F-150 production and idle one of its two F-150 plants for most of the third quarter. The 2009 model now is expected to launch on one shift in August at a plant in suburban Kansas City and on two shifts in late September at a plant in Dearborn, Mich.
"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 CEO Alan Mulally said in a statement.
The company slashed planned third-quarter truck production by 65,000 vehicles. It also lowered its industry U.S. light-vehicle sales forecast to 14.4 million to 14.9 million in 2008, down from the 14.7 million to 15.1 million it had predicted on May 22.
With sales worsening, Ford also warned that its automotive unit will lose more in 2008 than the $1.1 billion it lost before taxes in 2007. Ford also said it would burn through more cash than the $14 billion to $16 billion it previously projected for the period from 2007 through the end of 2009. Unless the economy improves, it will be difficult for Ford to break even companywide in 2009, officials said.
The past several weeks have been a crushing about-face for Ford. After a surprise $100 million profit in the first quarter and saying its turnaround was on track, rising gasoline prices derailed pickup sales and Ford's progress.
"It keeps getting worse," Credit Suisse analyst Chris Ceraso said in a research note.
Big incentives Ford put on its pickups in June are helping reduce the truck backlog, said Sinclair, the St. Louis dealer. Ford is offering employee pricing on the F-series, plus up to $6,000 in cash for returning Ford owners, he said.
Said Sinclair: "This is starting to do the job."