Faced With Staggering Losses Ford Retools Its Plants

Faced with plummeting sales of SUVs and trucks, Ford announced on Tuesday that it’s spending $75 million to convert a Michigan truck plant into a small-vehicle factory. American consumers, who’s budgets are already stretched thin by the rising cost of food and energy, are no longer buying the gas-guzzlers that once served as the automakers best-sellers.

The move is part of a plan designed to get the company back on track after losing $8.6 billion the first half of 2008, and seeing sales fall 14.1 percent. Ford’s best-selling product, the F-150 pickup, was down 22.4 percent at the end of July.

The Wayne, Mich. factory currently makes Ford Expedition and Lincoln Navigator full-size SUVs. Expedition sales are down 39 percent this year and Navigator’s tumbled 28 percent.

The converted plant, which Ford says will be able to build several hundred thousand small cars per year beginning in 2010, was temporarily closed for 10 weeks during the summer because of the lack of demand in the SUV and pickup market. One of those small cars will likely be the Focus, which has increased sales by 26 percent through July as Americans look towards more fuel efficient vehicles. The Wayne plant is one of three North American plants the company plans to retool in the coming years to focus its production more on smaller vehicles.

Overall, the entire U.S. auto industry has been taking a beating this year. General Motors recorded net losses of $15.5 billion, faring worse than even Ford‘s abysmal second quarter. All major automakers will hand in their August U.S. sales reports next Wednesday that will likely show improvements from the previous month, but are still likely to show staggering losses.

Source The Chicago Tribune:

Ford Motor Co., moving to wean itself from dependence on light trucks, said it will spend $75 million to convert a Michigan sport-utility-vehicle factory to build cars.

Work at the Michigan truck plant in the Detroit suburb of Wayne will begin in November, and production of an unspecified small car will start there in 2010, Ford said in a statement.

Source: Economy in Crisis

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