Monday, November 06, 2006

North American Vehicle Production, Slashed by Ford

by: Jay Stevens

Ford Motor Company is slashing by 21 per centum its vehicle production in North America. Said reduction will take effect in the fourth quarter of this year. Due to this declaration, thousands of workers are expected to be affected.

Ford is planning to build 168,000 fewer units of vehicles compared to what it had manufactured in the same quarter last year. Said reduction is not new for this year. This is because on the third quarter of this year, the automaker also slashed the previously announced third-quarter plan by 20,000 units. This year, Ford will only produce 9 per centum of vehicles compared to what it had produced in 2005.

Due to this reduction, 300 jobs will be lost at Ford's Windsor engine plant. In addition, 50 persons will also be laid off at the Essex engine plant. When asked about this chaotic change, Bill Ford, Ford chairman and CEO said, "We know this decision will have a dramatic impact on our employees, as well as our suppliers. This is, however, the right call for our customers, our dealers and our long-term future."

It was divulged that the slashing of the vehicle production will eventually result in downtime at some assembly plants. Said result will be made apparent between now and the end of this year. Assembly plants include the plant in St. Thomas, Ontario where the Mercury Grand Marquis and Crown Victoria are produced. Aside from North America, Ford will also take downtime at 9 United States plants. According to the automaker, full details of additional actions will be announced in September.

On the other hand, ford said that its plant in Oakville, Ontario will run on regular time or overtime, if needed. 6 plants in the US and Mexico will not be affected. Said plants will run on regular production to maintain the quality of Ford auto parts and vehicles.

It was reported that Ford suffered a $254 million in this year's second quarter. Ford's revenue also dropped from $44.55 billion to $41.97 billion. The North American operations also reported a pre-tax loss amounting to $797 million.

According to Dennis DesRosiers, automotive sector analyst said that the reasons behind Ford's move are the very soft U.S. market and the company's declining market share. "This latest cutback should have been made in January and they would be in better shape today," DesRosiers further added.

About The Author

Jay Stevens works as a consultant for an established auto parts store in the country. He has expertise in automotive technology and has extensive knowledge on the auto parts industry.


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