Re: US:Ford plans to build engine plant in China
Ford plans new engine plant in east China
SHANGHAI -- Ford Motor Co. and its Chinese partners plan to build an engine plant on the country's wealthy east coast as part of the U.S. giant's $1 billion investment program in the world's third-largest vehicle market.
The plant, which awaits government approval but is set to begin operations by early 2007, will have capacity to make 350,000 engines annually, Ford and its partners said on Tuesday.
Ford is expanding its Chinese plant to make 200,000 cars a year by 2005. With Mazda Motor Corp. and local player Changan Automobile Co. Ltd., it is building another car factory in the eastern city of Nanjing with initial annual capacity of 160,000 rising to 400,000 eventually.
The proposed engine plant would be next to the Nanjing vehicle factory.
"This growing Nanjing project is key to our expansion plans in China," Ford's Asia Pacific and African president, Mark Schulz, said in a statement.
Yin Jiaxu, chairman of Changan's state parent, told Reuters last month that sales from Ford's venture in the inland southwestern city of Chongqing should rise 25 percent this year. The plant's unit sales had been 50,000 last year, about 15,000 below target, Yin said.
Car sales in China grew 15 percent in 2004 after almost doubling in 2003, hit by government-ordered credit curbs to cool an economy in danger of overheating.
Ford earlier this month slashed its 2005 earnings forecast and warned it no longer expected to reach its 2006 profit goal, citing higher costs and becoming the second big U.S. automaker in less than a month to paint a bleak picture about its future.
The No. 2 U.S. automaker expects 2005 profit to be at least 14 percent lower than previously expected and does not expect to hit its 2006 profit goal of $7 billion before taxes, due in part to higher raw material and health care costs.
The profit warning caused Standard & Poor's to cut its debt rating outlook on Ford and its finance arm to "negative," bringing the automaker a step closer to junk status. A downgrade to junk could raise borrowing costs significantly.
Ford faces many of the same problems as rival General Motors, which warned last month that it would post its weakest first-quarter earnings since 1992 and that profits this year could miss forecasts by as much as 80 percent.
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.....