(autoinsidernews) - Ford Motor announced that it expects significant cuts up to 12 percent in its North American production for the first six months of 2007. Ford's production forecast expects its automotive business to hit bottom next summer, but the automaker then expects production to bounce back after midyear. Despite production increases in the second half of the year, overall production could up to 5 percent below this year.
Ford CFO Don Leclair disclosed the plan to cut vehicle production 8 to 12 percent in the first half of 2007, during an interview with Automotive News, but expects production increases later as inventories line up with consumer demand. The comparisons are easier, Leclair said. But importantly, we have a lot of new products coming, products that will be hitting their stride in the third and fourth quarter of next year.
With the inventories coming down, it takes a little bit of time for our cost-reduction efforts to kick in, CEO Alan Mulally said last week, reports Trend.
Ford has said that its financial results will suffer over the first six months of 2007 because the company's Way Forward cost-cutting plan won't compensate for the production cuts. But by fall, Ford's cost-cutting efforts will begin to generate savings. The cost reductions in the second half of next year will start to mount up, and we will see some improved performance on a year-over-year basis, Leclair said.