Ford cuts production, scales back profit goal Ford Motor Co. backed away from its pledge to return to profitability next year, saying skyrocketing fuel prices and commodity prices have put its North American turnaround plan behind schedule.
The Dearborn automaker also announced that it is cutting production of trucks and sport utility vehicles and increasing production of more fuel-efficient cars, because of "rapid changes in customer buying preferences," which was a major factor in its decision to revise its profit forecast.
"Unless there is a fairly rapid turnaround in U.S. 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," CEO Alan Mulally said in a statement released this morning. "Overall, we expect to be about break-even companywide in 2009 -- with continued strong results in Europe and South America."
Ford said its efforts to cut annual operating costs in North America by $5 billion by the end of this year remain on track, but said the faster-than-expected shift away from more profitable trucks and SUVs has slowed its broader campaign to restore profitability after years of losses.
"The challenge affecting the entire industry is the accelerating shift in consumer demand away from large trucks and SUVs to smaller cars and crossovers -- combined with a steep rise in commodity prices and the weak U.S. economy," Mulally said.
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