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Stacy94PGT · 05-26-2006, 05:49

Ford's new pickups delayed
Redesigned Super Duty to debut in January

BY SARAH A. WEBSTER
DETROIT FREE PRESS BUSINESS WRITER

Ford Motor Co. confirmed Thursday that it will not roll out its redesigned 2007 F-Series Super Duty pickup until January -- a delay that an analyst warned could reduce the company's earnings this year.

The Dearborn-based automaker aims to sell more than 900,000 of its profitable F-Series pickups for the third year in a row this year. If the truck lineup meets its sales targets, this year might mark the F-Series' 30th year as the best-selling pickup and 25th year as the best-selling vehicle in America.

The Super Duty, which is Ford's heavy-duty version of the F-Series pickup and goes by names such as the F-250 and F-350, is an important piece of the company's pickup sales, making up about 40%.

Ford had planned to release the new versions of the F-Series Super Duty in the fourth quarter -- a move that would have given Ford a jump-start on rival General Motors Corp. -- though it never publicly discussed that target date.

GM is slated to release its new Chevrolet Silverado and GMC Sierra this fall, with heavy-duty versions of those trucks coming to market in the first quarter of 2007.

Last October, however, Ford decided to delay the debut of the Super Duty until the beginning of 2007 -- meaning GM and Ford would both go head-to-head with their heavy-duty pickups at the same time.

Ford made the move to ensure the quality of its new line of diesel engines and for other reasons that Ford officials would not publicly disclose.

The Super Duty's previous 6.0-liter diesel Powerstroke engine, which comes in most of the heavy-duty trucks, is made by Navistar International Corp. and has had quality problems since 2003. Ford has had two recalls on the engine to address rough idling, stalling and emissions problems.

"We have to deliver the right quality," Ford spokeswoman Sara Tatchio said. "We feel we're on track and doing the right thing."

Rod Lache, a research analyst for Deutsche Bank, wrote in a note to investors Thursday that "any delay could have a negative impact" on Ford's earnings.

Tatchio, though, said Ford remained confident the F-Series would remain the pickup leader.

"We will maintain leadership, and that doesn't mean going by somebody else's timetable," she said.

What's more, she noted, since Ford never publicly divulged when the Super Duty would come to market, customers were not left waiting.

That was not the case, for example, when Toyota Motor Corp. delayed its delivery of the Lexus RX 400h, the hybrid version of the luxury brand's popular crossover.

Separately, the credit rating agency Standard & Poor's said Thursday it is considering sending the corporate debt rating for Ford and its finance arm deeper into junk, or speculative, territory because of the automaker's performance this year and intensifying challenges in the North American marketplace.

A corporation's credit rating is similar to credit scores for individuals and reflects how likely it is to default on its loans. A lower credit rating means the automaker might have more difficulty paying its bills and typically will pay higher interest rates on money it borrows.

Ford's North American sales and market share have continued to deteriorate this year, and the company is selling fewer profitable SUVs as sales shift toward cars.

S&P analyst Robert Schulz said a review of Ford's situation, which would include an examination of the full-size pickup segment, would be complete by the end of June.

"The full-sized pickup truck market is probably the last remaining segment of strong profitability for GM and Ford," Schulz said.

Schulz, though, said growing competition from GM and Toyota, which will release a new Tundra early next year, as well as growing concerns over rising gas prices might erode the profits that all automakers earn on their pickups.