Ford to cut North American vehicle production by 21 per cent

Our Corporate Bureau
18 August 2006

Mumbai: Ford Motor Company, the second biggest car maker in the United States, has announced sharp cuts in its North American production, involving partial shut-down of plants in the US and Canada in the fourth quarter.

Ford said it would reduce fourth-quarter production by 21 per cent, or 168,000 units, from fourth-quarter last year, while third quarter production would be down 20,000 units from previously announced. Ford said total vehicle production at its North American assemblies for the whole year would be 3.048 million units - a nine per cent reduction from last year.

"We know this decision will have a dramatic impact on our employees, as well as our suppliers," chairman and chief executive Bill Ford Jr. said in a notice to employees, adding, "This is, however, the right call for our customers, our dealers and our long-term future."

Dearborn-based Ford, which lost $254 million in the second quarter, is forced to cut production and close plants as it speeds up restructuring. Bill Ford Jr. said the cuts are part of that acceleration and full details of more actions will be announced in September.

The production cuts also reflect reduced demand for big trucks and sports utility vehicles amidst high gas prices, the company said.

The production cuts will result in partial job losses at Ford's eight assembly plants in North America, Ford said.