Ford cuts 2Q production by 10%
 

Automaker also cutting shifts at three plants

Amy Wilson
Automotive News
March 3, 2008 - 2:39 pm ET
UPDATED: 3/3/08 4:30 p.m. EST
 

DETROIT — Ford Motor Co. is cutting second-quarter North American production by 10 percent.

Ford plans to produce 730,000 vehicles in the second quarter of 2008, down from 811,000 vehicles in the same period a year ago, the company said today.

Ford is set to build 225,000 cars and 505,000 trucks in the coming quarter. That equates to a production cut of 4 percent on cars and 12 percent on trucks compared with the second quarter of 2007, said George Pipas, Ford sales analyst.

Ford’s first-quarter production forecast of 685,000 vehicles is unchanged, Pipas said.

He added that Ford’s production planning over the past 18 months has been based on a “cautious view” of the economy and how industry auto sales would unfold.

“Consequently, our production has been very stable, with very few changes, and quite predictable,” Pipas said.

Ford ended February with 596,000 vehicles — 184,000 cars and 412,000 trucks — in its U.S. inventory. That is 20,000 more vehicles than Ford had in stock at the end of January and 8,000 fewer vehicles than at the end of February a year ago.

Earlier today, Ford said it is cutting back to one shift at assembly plants in Chicago and Louisville, Ky., beginning in late summer. An engine plant in Cleveland also will be reduced to one shift.

The shift cuts affect 2,500 employees, who will go on temporary layoff, Ford said.

Ford also will delay restarting production at another engine plant in Cleveland until the fourth quarter of 2008. The automaker previously had planned to resume production at that engine plant this spring.

The announcement of the shift cuts comes two weeks before a deadline for Ford’s U.S. hourly workers to accept what the company is calling its last major companywide buyout. Workers have until March 18 to sign up for a buyout.

“We’re doing this now because the window is still open to take the buyouts,” said Ford spokeswoman Anne Marie Gattari. “We feel it’s important that our employees know what our immediate plans are as they make their decisions regarding the buyouts.”

Ford makes the Taurus sedan and Taurus X crossover in Chicago. Production of the Lincoln MKS sedan launches there this spring. The Louisville SUV plant makes the Ford Explorer and Mercury Mountaineer.

Ford says it has made future product commitments to both assembly plants.

The shift cuts won’t affect planned production volumes, officials said. Rather, it will reduce the number of weeks that the plants will be down for inventory adjustments.

Several weeks of downtime are scheduled for the Chicago and Louisville plants during the first half of 2008.

Gattari said the Chicago plant is on hiatus this week.