* 21 percent fourth-quarter reduction is part of aggressive realignment
of North American production - laying the groundwork for Ford's
accelerated Way Forward turnaround.
* Bill Ford: "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."
* Further actions aimed at accelerating Ford's turnaround will be
announced in September.
DEARBORN, Mich., Aug. 18 /PRNewswire-FirstCall/ -- Ford Motor Company
(NYSE: F) announced an aggressive reduction of North American production as
part of its broader efforts to accelerate the pace of its Way Forward
turnaround.
The company said it is reducing North American fourth-quarter production
by 21 percent -- or 168,000 units -- compared with the fourth quarter a year
ago. The revised plan also reduces the company's previously announced third-
quarter plan by 20,000 units.
Bill Ford, the company's chairman and CEO, outlined the decision to cut
production in a note to employees, explaining the decision is part of broader
efforts to accelerate the company's North American turnaround and saying full
details of additional actions will be announced in September.
"We know this decision will have a dramatic impact on our employees, as
well as our suppliers," Bill Ford told employees. "This is, however, the
right call for our customers, our dealers and our long-term future."
For full-year 2006, Ford now plans to produce 3.048 million vehicles at
its North American assembly plants -- 1.134 million cars and 1.914 million
trucks -- a 9 percent reduction from 2005.
The revised production plan is expected to sharply reduce the supply of
several models and reduce pressure on sales incentives and dealer inventory
carrying costs. The plan also reflects expectations for lower industry sales
of light trucks and truck-based sport utility vehicles, as high gasoline
prices are expected to continue to encourage demand for more fuel-efficient
passenger cars and crossovers.
Mark Fields, executive vice president and Ford's president of The
Americas, said the "tough-but-important" reduction in production plans
underscores the seriousness with which the company is approaching its North
American turnaround.
"We are basing our business plans on the customer, and we are determined
to match production and inventories with consumer demand," Fields said. "In
doing so, we'll reduce incentive spending and inventory carrying costs for our
dealers -- with the intent to improve residual values for our customers and
stabilize operating patterns for our plants and our suppliers."
The revised 2006 production plan is summarized in the table below:
2006 Production Over/(Under) 2005
Cars Trucks Total Cars Trucks Total
(000) (000) (000) (000) (000) (000)
First Quarter 316 560 876 52 (84) (32)
Second Quarter 328 569 897 34 (42) (8)
Third Quarter 255 395 650* 45 (123) (78)
Fourth Quarter 235 390 625 (13) (155) (168)
Full Year 1,134 1,914 3,048 118 (404) (286)
* The previously announced third-quarter plan was 670,000 vehicles
(255,000 cars and 415,000 trucks).
The new production plan will result in downtime at several assembly plants
between now and the end of the year, including: St. Thomas, Ontario (Ford
Crown Victoria and Mercury Grand Marquis); Chicago (Ford Five Hundred and
Freestyle and Mercury Montego); Wixom, Mich. (Lincoln Town Car); Louisville,
Ky. (Ford Explorer and Mercury Mountaineer); Michigan Truck in Wayne, Mich.
(Ford Expedition and Lincoln Navigator); Twin Cities, Minn. (Ford Ranger); and
all F-Series truck plants (Kansas City, Mo.; Norfolk, Va.; Dearborn and
Kentucky Truck in Louisville).
The following plants are expected to operate on straight time or overtime
based on consumer demand: Hermosillo, Mexico (Ford Fusion, Mercury Milan and
Lincoln MKZ); AutoAlliance International in Flat Rock, Mich. (Ford Mustang);
Oakville, Ontario (Ford Edge, Lincoln MKX and Ford Freestar); Wayne, Mich.
(Ford Focus); Kansas City, Mo. (Ford Escape and Mercury Mariner); Ohio
Assembly in Avon Lake, Ohio (Ford Econoline); and Atlanta (Ford Taurus).
Ford Motor Company, a global automotive industry leader based in Dearborn,
Mich., manufactures and distributes automobiles in 200 markets across six
continents. With about 300,000 employees and more than 100 plants worldwide,
the company's core and affiliated automotive brands include Aston Martin,
Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-
related services include Ford Motor Credit Company.
SOURCE: Ford Motor Company
NOTE TO EDITORS: Go to http://media.ford.com for news releases and high-
resolution photographs.
CONTACT: Oscar Suris, +1-313-594-1106, osuris@ford.com George Pipas,
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+1-800-555-5259 or +1-313-845-8540, stockinf@ford.com all of Ford Motor
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