Ford plans unchanged with gas price drop
TRAVERSE CITY, Michigan (Reuters) - Ford Motor Co's (F.N) plan to overhaul its North American operations to produce more cars remains unchanged amid recent declines in gas prices, a top executive said on Tuesday.
"In general, if oil prices come down, that will be a good thing," Mark Fields, Ford's president of the Americas, told reporters. "Will that be a direct correlation to helping the industry and the economy? I don't know."
Ford, which posted an $8.7 billion second-quarter net loss, has said a sharp rise in gas prices accelerated a decline in demand for large trucks and SUVs starting in early April.
A decline in gas prices would support consumer confidence, but customers still face job risks, potential financing difficulties with tight credit markets and other factors and it would not change Ford's planning assumptions, Fields said.
Ford has been restructuring in North America to meet increased demand for passenger cars and a drop in demand for larger trucks and SUVs that once were huge sources of profit for the automaker.
Fields said there have been some signs the U.S. pickup truck market was coming back over the past month or two, in part due to merchandising by manufacturers. Truck makers have been offering thousands of dollars in rebates to move the slow-selling vehicles.
Ford, which is launching a new version of its top-selling F-150 pickup truck later in 2008, expects to maintain its share of the market, though the overall market continues to shrink. The launch was delayed by two months due to slack sales of the current model.
Ford is not yet sure whether it will have to offer cash on its new F-150 truck, Fields said.
With U.S. auto sales falling to a 16-year low in July, Ford and the rest of the market has continued to reel from the impact of tight credit markets and high gas prices.
Earlier this year, Ford abandoned a longstanding goal of returning to profitability in 2009. It has not set a new target year for returning to profitability.
"Our profitability will return when the economy starts turning," Fields said.
(Editing by Ben Tan)
