Ford Motor Co. is adding six European small cars to its North American lineup as the second-largest U.S. automaker adapts to "rapid changes"...
Ford Motor Co. is adding six European small cars to its North American lineup as the second-largest U.S. automaker adapts to “rapid changes” in demand for fuel-efficient models.
Two sport-utility vehicle plants in Michigan and Kentucky will be converted starting in December to build the cars, Ford said Thursday as it reported a record $8.7 billion quarterly loss, including an $8 billion one-time write-off for factory closings and losses in the value of car leases.
The move to import models is in reaction to plunging demand (off 18 percent) for the SUVs, pickups and vans that had formerly been the majority of Ford’s U.S. sales. Meanwhile, Ford has had great success overseas.
“As a cheaper remedy, Ford is borrowing their own designs for small vehicles from Europe and Asia,” said Michael Robinet, an analyst at CSM Worldwide.
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Two-thirds of Ford’s spending will be focused on cars and car-based crossover SUVs by the end of 2010, compared with one-half now, the automaker said.
The plant conversions to small cars involve a factory in Wayne, Mich., that now assembles Lincoln Navigator and Ford Expedition large SUVs, and one in Louisville, Ky., that builds Explorers.
Additionally, a St. Paul, Minn., factory that builds the Ranger small pickup will stay open to 2011, a two-year delay in Ford’s plan to shut the facility. Demand for the Ranger hasn’t slumped as much as it has for full-size pickups.
Gasoline-electric hybrid production will double to 50,000 units annually, spokesman Mark Truby said.
Next year, Ford will introduce its more efficient EcoBoost turbocharged direct-injection engines, which will be used in most models.
The company also plans to revamp nearly all its North American assembly plants so that they will be more flexible and able to respond more quickly to changes in market demands. (Honda recently shifted a plant’s production from slow-selling Ridgeline pickups to hot-selling Civics in mere days.)
Chief Financial Officer Don Leclair said Ford’s capital expenditures will reach $6 billion annually between now and 2010 because of the cost of revamping plants and introducing new products and engines.
The company identified only three of the European small vehicles it will bring to North America: the Transit Connect small van, the European Focus and the subcompact Fiesta.
Ford said the other three vehicles would be identified later, including one that is unique in its segment.
Other possible vehicles are the Kuga small crossover, the C-Max small van and the Mondeo midsize car.
Ford also announced that the next-generation Ford Explorer midsize SUV will come out in 2010 and be built on car underpinnings, making it more fuel efficient.