US:Ford COO Padilla says profits elusive in North America
Ford COO Padilla says profits elusive in North America
DETROIT (Reuters) -- Jim Padilla, Ford Motor Co.'s COO, on Tuesday declined to predict when the struggling automaker's North American operations would again be profitable, but said he sees difficult times for the whole industry in the next 18 to 24 months.
"I think the nature of competition in the marketplace is very, very challenging for all of us," Padilla said at the Reuters Autos Summit in Detroit.
Strong competition, soaring health-care and raw material costs, and a slide in U.S market share has forced the second-largest U.S. automaker to slash its profit forecast twice this year. Ford's North American auto operations swung to a pretax loss of $1.21 billion, including charges, in the second quarter.
The automaker also said it would no longer provide a quarterly financial forecast, echoing a move by cross-town rival General Motors.
"I get impatient too but I also don't walk on water," Padilla said when asked to forecast a financial turnaround for in the North American business.
The automaker has said it will announce a restructuring plan this fall and has not ruled out deeper job cuts in its salaried workforce or the closing of manufacturing plants.
This would be the second time that Ford has put together a financial turnaround plan. A multi-year restructuring program was launched in 2002, which included 35,000 job cuts, the shuttering of up to seven North American plants and the elimination of unprofitable vehicle models.
"I don't think it went wrong," Padilla said, referring to the 2002 plan. "None of us anticipated the aggressive pricing in the marketplace."
"When we put our plan together we assumed that incentives and the like would be in the range of 13 to 14 percent," he said. "Reality is that incentives has been 18 to 20 percent for the last several years.
Padilla said Ford has no plans to extend its big employee pricing discounts -- under which the consumers can purchase a vehicle at the same low price as a Ford employee -- beyond Oct. 3 or offer it on 2006 model-year vehicles.
Ford currently offers the big rebates on 2005 model-year vehicles. The deal, which boosted Ford's sales in July and August, was offered on 2006 model year vehicles for a limited time in August.
In wide ranging comments, Padilla said Ford does not see high U.S. gasoline prices affecting sales of pickup trucks, despite a decline in the sales of large gas-guzzling SUVs.
Ford is on track to sell 900,000 F-series trucks this year, he said.
Padilla said the automaker could be offering more hybrid vehicles if it weren't for the shortage of specialized components, partly due to the "predatory" approach taken by some Japanese automakers.
"It is a supply issue, and it's supply of several technologies," Padilla said.
The COO also said "everything is on the table" as far as its ailing European luxury Jaguar division is concerned, but added that Ford has no immediate plans to sell the group.
Ford owns Jaguar as well as Volvo, Aston Martin and Land Rover, all brands in its Premier Automotive Group, which posted a pre-tax loss of $740 million last year.
"That's not something that we've been pursuing," Padilla said when asked whether he sees a Ford future without Jaguar.
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.....