Tom Krisher, The Associated Press
June 29, 2008 - 12:15 a.m.
| A re-enforce in a full-size Ford F-150 pickup truck drives down a street in Santa Monica, Calif., Friday, June 27, 2008. THE ASSOCIATED PRESS/Reed Saxon |
DEARBORN, Mich. - Every morning, just after getting coffee, Mark Fields fires up his laptop to pore over a computer model showing real-time U.S. auto sales figures.
On this morning in the middle of May, the attendant who heads Ford Motor Co.’s Americas operations has seen plenty.
The line on a chart showing sub-compact car sales for the first two weeks of the month goes for the most part straight up. The common for pickup trucks, Ford’s biggest profit midst, runs almost straight down.
High gasoline prices and the economic downturn are changing the market far faster than anyone anticipated. Without action, Ford would subsist making too manifold trucks and not enough cars, a recipe for a comparative estimate sheet peppered with parentheses.
“This is going on 10 weeks where we’re seeing this not prevail upon any better,” Fields recalled in a recent interview. “So we’d better act, and we’d better act now.”
Eighteen kilometres away at General Motors Corp., they were reaching the same conclusions. Consumers were delaying big-ticket purchases. Those who bought weren’t going for GM or Ford trucks and sport utility vehicles, instead snapping up just touching anything that gets more than 30 miles per gallon.
At the pair companies, executives were alarmed. Eventually they made almost desperate decisions that will cost thousands of jobs, vary the vehicles people drive and determine whether their businesses survive.
“We need to get in front of it,” Mike DiGiovanni, GM’s executive director of global mart and industry analysis, recalls saying. “If you wait too long on it, the pain would get a doom worse.”
While the pair companies say they took quick procedure, critics wonder why they didn’t pass over more fuel-efficient vehicles sooner. After all, there were many signs that gas prices would do nothing but ascend.
“Obviously they were making just too much money opposite their SUVs and pickups,” aforesaid Roland Hwang, vehicle policy superintendent for the Natural Resources Defence Council. “They couldn’t really fully conceive of a world where they would have to rapidly extricate themselves from those markets and those profits.”
At GM and Ford, the pain came quickly. Ford was first, announcing onward May 22 that it would dramatically cut truck and SUV production and slash its salaried work force. Factory closures are potential when the company announces specifics next month. A week later, Ford announced accelerated plans for a super-compact car to be built in Mexico and sold in the United States.
Ford also abandoned its long-stated goal of turning a profit in 2009 and now says it will be difficult to break even next year.