DETROIT -- With its massive production cut announced today, Ford Motor Co. is officially backing away from an earlier target to sell 900,000 F-series pickups in 2006. Ford sales analyst George Pipas wouldnt provide a new sales goal but said, 900,000 is out of reach.
The F series accounts for more than half of the North American production cut Ford announced today, Pipas said. The head winds in this segment are pretty strong right now, he said. Were spending more and more money on incentives and enjoying it less.
Ford today said it was slashing 168,000 units, or 21 percent, from its North American production in the fourth quarter compared with a year ago. It now expects to build 625,000 vehicles in the fourth quarter.
The automaker said it also was cutting an additional 20,000 units from its third-quarter North American production plan. Ford expects to build 650,000 units in the third quarter. That is down 10.7 percent from the 728,000 units it built in the third quarter of 2005.
Most cuts come from truck production. Ford plans to cut fourth-quarter truck production by 155,000. It will cut 13,000 cars from the schedule.
For the full year, Ford now expects to build 3,048,000 vehicles in North America, a 9 percent reduction from 2005. The full-year production is expected to break down into 1,134,000 cars and 1,914,000 trucks.
The production cut is part of Fords plan to accelerate its Way Forward restructuring plan for North America. Given higher gasoline prices and sharp declines in light-truck sales, the automaker acknowledged last month that it needs to cut faster and deeper.
More actions will be announced next month. Ford is expected to move up plant closing dates and cut additional salaried jobs and benefits. Ford also could add plants to its capacity-reduction plans and open buyout packages to all U.S. hourly production workers, sources say.
Todays production cut triggered Fitch Ratings to downgrade Ford Motors credit ratings deeper into junk territory. Rating agencies Moodys and Standard & Poors also put Ford on watch for further downgrades.
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