Scene Changing at Ford Dealerships as vehicle are Phased Out

Adjust Comment Print

Ford Motor Co. is sharpening its knives to cleave another $11.5 billion from spending plans and cut several sedans, including the Fusion and Taurus, from its lineup to more quickly reach an elusive profit target.

The No. 2 automaker in the USA said it is now planning to cut up to $25.5 billion by 2022 in costs, which is up from its previously announced amount of $14 billion last fall.

"The passenger vehicle rationalization plan is just the sort of bold and decisive action we believe investors have been waiting for", Ryan Brinkman, an auto analyst at JPMorgan Chase & Co. wrote in a report Thursday. "We're going to feed the healthy part of our business", and dispose of marginal operations, Hackett added.

The company expects its profit margin in North America to rise to 10 percent by 2020, Shanks said.


Instead, the Ford auto portfolio in North America will transition to two vehicles -- the best-selling Mustang and the all-new Focus Active crossover coming out next year.

And Ford is not the only American vehicle company scaling back production of sedans.

The carmaker has come under heavy pressure from investors to make improvements to its product lineup as well as lift its profit margins that have fallen.

The automaker's pre-tax profit fell 14% to $2.2 billion for the quarter.


The closest vehicle to being car-like (apart from the Mustang) in that transition will be the Ford Focus Active, which is itself billed as a crossover.

Speaking on Wednesday as the company reported first-quarter results, Chief Financial Officer Bob Shanks said 'we have looked at every single part of the business.We are driven to turn this business around'. "We are driven to turn this business around". Yahoo Finance put the average estimate of analysts at US$0.41 a share.

Ford's revenue worldwide increased 7 percent to $42 billion for the quarter.

Some 110 years after the first Model T rolled off the line, Ford has chose to start phasing out vehicle sales. Other models, including the Taurus, the original Ford Focus, the Fiesta and the Fusion, will no longer be available in the United States or Canada.


Comments