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Ford slashes 4Q production.
The automaker will cut vehicle production by 21% in the last three months of the year. With gas prices at $3, the company will lower the number of pickups, and truck-based SUVs coming off the assembly line.
Ford Motor announced this morning it is slashing production by 21% in an effort to turn around its automotive business.
Ford, which lost more than $1.4 billion in the first half of the year, will cut fourth-quarter production by 168,000 vehicles. The majority of the cuts are coming in truck models – a move that Ford says reflects falling demand for light pickup trucks and truck-based sport utility vehicles in a time of high gas prices.
The company will also cut third-quarter production, already planned down, by an additional 20,000 units.
"We know this decision will have a dramatic impact on our employees, as well as our suppliers," CEO Bill Ford said in a statement. "This is, however, the right call for our customers, our dealers and our long-term future."
Ford plans to cut 6,000 salaried jobs next month, about 6% of the white-collar workforce, Bloomberg News reported today, citing a person with knowledge of the plan. Those cuts would be in addition to 30,000 job cuts planned by 2012.
The company said full details of additional turnaround actions will be announced in September. Ford, facing higher costs and a loss of market share, revised its second-quarter loss up to $254 million on Aug. 2.
Wall Street is unimpressed.
The stock market usually applauds radical cost cutting moves for money-losing companies, but shares of Ford fell more than 3% in morning trading.
It is probably the magnitude of the cuts, which are "very drastic," that is spooking investors, John Stoll, automotive reporter at Dow Jones Newswires, told CNBC's "Morning Call."
In addition, the company's reduced production of high-profit pickup trucks -- coming at a time when Ford is losing so much money -- is also a concern, Stoll said.
