Truemors
Ford Motor Company today announced that they are going to be transforming their vehicle lineup due to the largest reported loss for the company in its 105 year history.
Their stock also fell about 16% - which is a LOT for anyone who is unsure what that number means. Especially in the case of a global company with a long history of success.
"Because of deteriorating economic conditions, demand has declined dramatically, especially in North America," said Ford CEO Alan Mulally, who also blamed rising gas prices for the decline.
Mulally said the company is working toward reducing its salaried workforce by 15%. The company aims to save $5 billion annually, and has managed to reduce costs by $1 billion so far.
He also said the company is now shifting its focus "to bring to the North American market smaller, more fuel-efficient vehicles that people increasingly want."
Ford is going to start selling smaller cars in North Amercia and not such big trucks.
The three large truck and sport utility plants in Michigan, Kentucky and Mexico will be switched over to the manufacture of smaller cars starting this December. But production of smaller cars in general will be ramped up regardless.
Ford is hustling to keep up with demand of the smaller cars as gas has just become too expensive to drive the larger trucks. Some lines will continue for now though.
Ford said it lost $8.7 billion, or $3.88 per share, in the second quarter, including pre-tax special charges primarily due to the write-down of assets. A year earlier, the automaker announced a profit of $750 million, or 31 cents per share.
Without charges, Ford reported a loss of $1.4 billion, or 62 cents per share, in the latest quarter.
I think this is a good idea for Ford. I know they are losing money right now, but a switch over to smaller cars and more economic vehicles will benefit everyone. I hate big trucks anyway, but that's just my opinion...
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