Ford Motor Co. is activating what it calls and “aggressive plan” to reduce North American production capacity as part of a broader effort to return the company to profitability for both the near and long term.
The company said it’s closing 10 plants and reducing North American fourth quarter (4Q) production by 21% (168,000 units), affecting mostly light trucks and sport utility vehicles (SUVs). Ford also plans to cut a further 20,000 units out of 3Q production.
“We know this decision will have a dramatic impact on our employees, as well as our suppliers,” said Bill Ford, the company’s chairman & CEO. “This is, however, the right call for our customers, our dealers and our long-term future.” He noted that additional cost-cutting actions are going to be announced in September.
For 2006, Ford Motor now plans to produce 3.048 million vehicles at its North American assembly plants—some 1.134 million cars and 1.914 million trucks—a 9% reduction from 2005. Light truck and SUV production will see the sharpest drop, down 123,000 units in 3Q and 155,000 units in 4Q, compared to 2005.