Auto news
Ford intends to update frequently
Competitors drive need for changes
June 16, 2006
BY JUSTIN HYDE
FREE PRESS WASHINGTON STAFF
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- After four months of falling sales, Ford Motor Co. will lengthen summer shutdowns at some North American factories, the head of the automaker's operations in the continent said.
"We do have a two-week shutdown, and where we have a lack of demand at some plants we've extended that," executive vice president Mark Fields told reporters Wednesday in Washington, D.C. He declined to say which factories would be idled longer.
The company probably will announce production plans for July, when the shutdowns usually begin, in the next week or two, Fields said. Ford said June 1 that, for the quarter that starts next month, it will build 2.5% fewer cars and trucks than a year earlier in North America.
The longer shutdowns could be at plants such as Wayne; Louisville, Ky., and St. Paul, Minn., that produce trucks, analyst Erich Merkle at consulting firm IRN Inc. said.
Bloomberg
<!-- BODY TEXT --><!--ARTICLE BODY TEXT-->WASHINGTON -- Ford Motor Co.'s top North American official says the company no longer can build some models for years with just cosmetic changes to save costs, as growing competition demands more frequent and thorough updates.
More than any other automaker, Ford has maximized its profits by minimizing its capital spending on certain models. Ford's Panther platform, the basis for the Crown Victoria, Grand Marquis and Town Car, has been in production since 1978 with only occasional changes in styling.
The underpinnings of the Ford Ranger were launched in 1983, and the previous generation of Mustangs rode the Fox platform for 25 years.
That strategy was rooted in traditional economics of building cars.
The cost of factory machinery is spread over a number of years, and once that machinery is paid off the cost of making the vehicle plunges. Despite being sold mostly to taxicab companies and limousine fleets, the Crown Victoria has been among Ford's most profitable vehicles in recent years. It is also the top-selling police cruiser.
But Mark Fields, president of Ford's North and South American business, said Ford is committed to more frequent updates to stay competitive. Fields said Ford would reduce the average age of its fleet from 4.4 years today to 3.2 years by 2008.
As for using a platform for a decade or more, "that era is over," Fields said Wednesday in a discussion with reporters about the Ford, Lincoln and Mercury lineups. "The dynamics of the business have changed, and, if you sit back and deny that, the realities of the business catches up with you."