Ford Motor Co outlined a plan to cut costs and boost profit margins at a faster pace than previously announced, which includes dropping traditional sedan models in North America that have become increasingly unpopular with consumers. The No. 2 U.S. automaker said it now plans to cut $25.5 billion in costs by 2022, up from $14 billion in cuts it announced last fall.
Ford Chief Executive Jim Hackett told investors the company is undergoing "a profound refocus" of its operations and may exit unprofitable businesses. Ford said it expects pretax profit margins of 8 percent globally and 10 percent in North America by 2020, ahead of a previous target of 2022.
Responding to a shift in consumer demand to SUVs and pickup trucks, Ford said it planned to trim its North American car portfolio to just two models: the sporty Mustang, which debuted 50 years ago this month, and a new compact crossover called Focus Active starting in 2019.
Ford "will not invest in next generations of traditional Ford sedans for North America," including the midsize Fusion and full-size Taurus, the company said.
In March, Ford executives unveiled ambitious plans to shift the struggling automaker's product portfolio from passenger cars to SUVs, add more hybrid and pure electric vehicles, and reduce
development and manufacturing costs - aimed at boosting profits and the automaker's share price.
The lion's share of the automaker's quarterly profit was driven by high-margin pickup trucks and SUVs in North America. Europe was the only other region to turn a profit for Ford. The company's loss in its Asia Pacific region was driven by slumping sales in China, where Ford has just begun to introduce new models.
Also Watch:
Comments
0 comment