Industry report: Ford cost cutting studied
October 30, 2002/AUTOS
Ford cost cutting studied
Ford Motor Co. Chief Executive Officer William Clay Ford Jr. said he will begin this week to review proposals to cut the next $1 billion in costs.
The CEO also told investors in Los Angeles that next year's auto sales market "looks like it may not be great." Ford, speaking at one of a series of shareholder meetings that began last week, said the list of potential cost reductions has "come together quite nicely," and will be reviewed starting Thursday.
Ford said last week the new cuts would be an acceleration of the $6 billion to $9 billion in cost cutting the world's second-largest automaker announced in January. He said the company is "not projecting a terribly strong market" in 2003, without giving specifics. "We have no idea what is going to happen," he said. "We can't forecast October."
The company had a loss of $5.5 billion in 2001, prompting Ford to announce the restructuring plan in January. The proposal calls for eliminating jobs, closing plants and introducing new models to generate $7 billion in annual pretax profits by 2005.
Navistar profits to shrink
Navistar International Corp. pulled out of the Brazilian market and said it lost a contract to supply V6 diesel engines to Ford. The moves, along with planned factory closings, will cut profit at the fourth-largest truck maker by as much as $456 million.
The company will write off as much as $130 million in assets after Ford decided not to buy the engines for its trucks. Navistar is getting out of the Brazil market because this year's devaluation of the country's currency has made doing business there unprofitable over the near term.
The remaining costs cover the previously announced closings of an Ohio truck factory, an assembly line at another Ohio plant and the company's Ontario heavy-truck plant, Navistar said.
The Warrenville, Ill.-based truck maker had already forecast a loss for the quarter ending Oct. 31 of as much as $1.10 a share, which it blamed partly on slower engine production and disruptions in medium-duty truck output at plants threatened with strikes. The company reached a 5-year labor agreement with the United Auto Workers on Friday. It was ratified by the union on Sunday.
Dana to focus on core business
Dana Corp., the largest maker of light-truck axles, will sell three non-automotive businesses to the Riverside Co. leveraged buyout company to focus on selling car and truck parts.
The three businesses -- Tekonsha Engineering Co., Theodore Bargman Co. and American Electronic Components Inc. -- employ about 700 workers and had combined sales of $81 million last year. Toledo-based Dana did not disclose a sale price.
Dana is selling off and closing businesses as it focuses on supplying parts for the automotive industry and commercial truck and off-highway vehicle markets. The company plans to eliminate more than 11,000 jobs, or 15 percent of its workforce, as part of the reorganization.
Tekonsha Engineering in Tekonsha, makes electric brake controls, trailer hitches and related parts for recreation and agricultural vehicles and trailers. Theodore Bargman in Albion, Ind., makes illumination products, electrical accessories, locks and latches; and American Electronic Components in Elkhart, Ind., makes sensors, switches and relays.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....