CNN Money: Ford to cut output further, trims financial outlook

[Goaldeje]

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Ford Motor Co. (F), battered by an accelerating decline in sales of trucks and sport-utility vehicles in recent weeks, on Friday announced deeper production cuts and further scaled back its earnings expectations for this year and next.

The Dearborn, Mich., auto maker now plans to cut third-quarter production by 25% and fourth-quarter production by as much as 14%. The company will also delay the launch of its redesigned F-150 pickup truck by two months, to give dealers a chance to sell existing inventory of the vehicles, while expanding plans to add small cars to meet shifting consumer demand.

The news comes just one month after Ford first announced production cuts for large vehicles and scrapped its long-standing goal of returning to full-year profitability in 2009. The company pointed to the sharper-than-expected decline in sales of trucks and SUVs - long the main source of sales and profits for the Detroit auto makers - as gasoline prices hit record highs.

Conditions in the U.S. automotive market have deteriorated further in recent weeks, prompting a further assessment of production plans and earnings expectations.

"As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industry-wide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades," Ford Chief Executive Officer Alan Mulally said in a press release.

Ford, for the first time, said its automotive unit's 2008 pre-tax results will be worse than 2007 and that cash outflows to cover restructuring and operating losses will be greater than previous guidance. Ford, which just a month ago said it would likely be a break-even company in 2009 on a pre-tax basis, said Friday it will be difficult to break even next year.

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[Goaldeje]

Update: LA Times: Ford to Delay F-Series Pickup

With sales of pickup trucks and sport utility vehicles plummeting in step with soaring gasoline prices, Ford Motor Co. said today that it would delay release of its much-anticipated new F-Series pickups and reduce production of larger vehicles. The company also said it did not expect to be profitable through 2009.

The news, the latest in a series of recent negative developments for the second-largest U.S. automaker, drove Ford stock down 44 cents, to $5.86, in early trading in New York, a 7% slide.

In addition, Dearborn, Mich.-based Ford said its auto financing unit, Ford Motor Credit, would lose money this year. That unit, which has been profitable for many years, is suffering because of declining values of used pickups and SUVs on the secondary market, as well as difficulties in accessing global debt markets because of the worldwide credit crunch. Last year, the lending division had a profit of $775 million, down from $1.28 billion in 2006. For the first quarter of this year, it reported net income of just $24 million.

The automaker said that it would cut production for the remainder of the year significantly -- as much as 25% in the third quarter -- and that the newly designed F-150 pickup, due to go on sale in early fall, would come to market two months later than planned.