Ford may further cut US vehicle output

24 January 2008 20:40  [Source: ICIS news]

HOUSTON (ICIS news)--Ford Motor may need to further cut back vehicle production at its struggling North American units as the US economy weakens, the US automaker indicated on Thursday.

“Although our automotive operations are improving on a year-over-year basis, the US economy is slowing and the outlook for the auto industry remains challenging,” president and chief executive Alan Mulally said. 

The downturn in the US auto sector has been closely aligned with the slump in the country's housing market. The falling production rates at US car plants have hurt demand for many chemicals.

 “To help ensure we are able to deliver our commitments despite the difficult external environment, we will be taking further cost reduction actions in North America," Mulally said in a statement.

Those measures would include buyouts of unionised workers, a reduction in vehicle complexity, and a readiness to "adjust production to the changing business environment”, Mulally said.

Ford announced on Thursday its North American automotive operations posted a fourth-quarter pre-tax loss of $1.6bn (€1.1bn), compared with a loss of $2.7bn a year earlier.

For all of 2007, the North American business lost $3.5bn, narrowing from a loss of $6.0bn in 2006. 

The improvement was partly due to radical cutbacks to production. Ford sliced 32,800 workers from its payroll last year.

On Wednesday, Japanese chemical company Kuraray said it has delayed its target date for the second-phase expansion of its existing 35,000 tonne/year ethylene vinyl alcohol (EVOH) resin unit in Texas to 2009, due to weak demand from car manufacturers.

($1.00 = €0.68)

By: Stephen Burns
+1 713 525 2653

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