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Ford banks on new vehicles

Mark Fields pledges to restore profits in North America in 2008 with carmaker's new products.

Bryce G. Hoffman / The Detroit News

DEARBORN -- Ford Motor Co. remains committed to restoring profits at its North American automotive business by 2008, despite a faster than expected drop in sport utility vehicle sales.

"Our commitment for 2008 is very, very serious," Mark Fields, president of Ford's Americas group, told reporters Wednesday at an event showcasing the 2007 vehicle lineup. "On balance, we are where I expect us to be."

Ford is banking on bringing new products to market faster and for less money to help reverse sagging sales as part of its sweeping "way forward" restructuring. The plan, which Fields outlined in January, also includes cutting 30,000 jobs and closing 14 factories by 2012.

The lineup for 2007 includes the five-passenger Edge crossover vehicle, which hits showroom floors in November, and a Lincoln version called the MKX. The automaker also reworked its Expedition SUV and added an extra-long model with more storage, as well as reworked the Lincoln Navigator and Navigator L.

Ford did not introduce any completely new cars, but is offering all-wheel-drive in the Ford Fusion, Mercury Milan and Lincoln MKZ, which replaced the Zephyr. It also will roll out the new Shelby GT500, the most powerful factory-built Mustang ever, and said it will add new technology to the standard Mustang annually to keep interest from waning.

The product review was held at Ford's proving grounds, where the automaker has invested $43 million to transform the facility into a state-of-the art testing site that will help cut about a year off design-to-production time. So far, Wall Street has been largely unimpressed with Ford's restructuring plan, but Fields said he does not spend much time worrying about Wall Street.

"They're going to come to their own conclusions based on whatever data they have," he said. "I don't get frustrated. I get motivated."

While Ford made $2 billion overall last year, its North American operations lost $1.6 billion and has been unprofitable for six of the last seven quarters. In the first three months this year, Ford lost $1.19 billion, mainly because of losses in North America and restructuring costs.

Much of the decline is tied to falling SUV sales. Through May, U.S. sales tumbled 27 percent for the midsize Explorer SUV and 30 percent for the larger Expedition, as gasoline prices rose 34 percent.

"We always expected to decline, but it's going at a more accelerated rate," Fields said. "That's a bit of a concern for us."

Ford generated about $8,000 in pretax profit on each mid- size SUV and $11,000 on large models as recently as 2004, Burnham Securities analyst David Healy said.

Healy, who is based in Sierra Vista, Ariz., said that because of discounts Ford is offering on the vehicles, the automaker may not be making money on them.
 
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