Over coming years Ford intends to stop selling most of its cars in North America. This plan would leave just the Mustang and upcoming Focus Active as the only traditional car it sells while crossovers, SUVs and trucks make up the rest of its lineup. The news was abruptly revealed in Ford’s latest quarterly financial release and left many questions and here’s the answer to at least one of them.
The Focus, Taurus and Fiesta will be the first to go. Ford will end production on the Focus in May 2018, the Taurus in March 2019 and the Fiesta in May 2019. The mid-size Fusion will stick around a bit longer.
As for the upcoming Focus Active, as of right now, the vehicle will be assembled in China and imported to the United States.
Ford’s CEO laid out a cost reduction plan in late 2017. This plan calls for Ford to cut operating costs by $14 billion. The culling of sedans and small cars saves Ford around $5 billion.
“We’re going to feed the healthy parts of our business and deal decisively with the areas that destroy value,” Hackett said. “It’s been easy to identify what’s wrong and what we need to do about it. The hand-wringing maybe that has been around in our business is gone. We’re starting to understand what we need to do and making clear decisions there.”
The company’s financials are seemingly improving, too. Revenue increased 7 percent to $42 billion over 2017 levels with Ford making $1.7 billion in the first quarter of 2018, an increase of 9 percent.
“Everything is on the table,” said Bob Shanks, Ford chief financial officer. “We can exit products [and] markets. We will do that. That work has really gained traction. We have looked at every single part of the business. It’s a very complex endeavor. We are determined to turn this business around right throughout the whole company. There’s more work that’s underway.”
It’s likely jobs will be lost from the reduction of cars but most production lines will also be retooled for new vehicles. Ford is going all in on crossovers and SUVs, which will have to be built somewhere.
Published at Fri, 27 Apr 2018 13:02:14 +0000