In their quarterly earnings report, Ford announced today that its operations lost $1.3 billion in rising production costs during the second quarter. While sales produced $258 million, over $8 billion in losses and devalued assets produced a flood of red ink.
All told, Ford lost $8.7 billion for the second quarter of 2008, making this the worst quarter in the company's history.
Yesterday, we reported that the Mercury brand will be infused with a large percentage of vehicles drawn from Ford's European offerings. Following the grim financial news this morning, Ford released new details on the company's revamped product line.
• Michigan, Kentucky and Mexico plants to retooled:
Beginning in December, the company will retool the Wayne, Michigan plant to build a new sedan bred from the European Focus platform. Production of the Ford Expedition and Lincoln Navigator - rumored earlier to be on the chopping block - will be moved to the Fayetteville, Kentucky plant early next year.
In 2011, the Louisville, Kentucky plant will retool from Ford Explorer production to more intermediate and compact sedans.
The third plant — which went unnamed in yesterday's report — to shift to car production will be in Cuautitlan, Mexico. The plant currently builds the F-series pickup, will build the new Ford Fiesta hatch in early 2010.
Bucking the trend, the Ford Ranger compact pickup has received a stay of execution. Previously, Ford announced that production would end in 2009; the company announced today that the Minnesota plant which builds the Ranger will continue production through 2011.
• New product plan to eliminate redundant platforms:
As reported by Automotive News Daily, Ford confirmed the following products in development:
• Ford will introduce a version of the European Transit Connect small van.
• Lincoln will receive a seven-passenger crossover, likely to be based on the Mazda CX-9 crossover.
• The European Ford Fiesta will debut in sedan and five-door hatchback versions. The Mercury division will receive their own as-yet unnamed model based on the new Fiesta.
• The US Ford Focus will switch to the European market platform in sedan and five-door hatchback models.
Late 2010, 2011:
• A uni-body version of the next-generation Ford Explorer will arrive. In addition to new drivetrain and
significant weight reduction, the new model will improve fuel economy by as much as 25 percent.
In addition to the new platforms, Ford announced it will accelerate development of its EcoBoost engines, which will replace the venerable "modular" V8 engine range with a series of smaller displacement, turbocharged and direct injected V6 mills.
• Hourly worker buyouts to continue:
In addition to the overhauled product range, Ford said it would continue to offer targeted buyout plans to hourly workers at its US plants. The company said it is on track to reduce their salaried worker costs by 15 percent — most of which will come through attrition — in the US by August 1st.
Trading on today's news weighed heavily on Ford; company stock fell by 15.3 percent to close today at $5.11 per share.