Ford - Change in Product Mix

Automotive

July 25, 2008 - reported 2Q loss of $8.7 billion = worst quarterly loss in its 105-year history ($5.3-billion charge to write down value of plants that build pickups, S.U.V.s; $2.1 billion write-down by Ford Credit, auto loan division, to cover shrinking value of lease portfolio; $1 billion loss from auto operations); 2008 sales of large pickups down 25%, sales of S.U.V.s own 32% (source: Ward’s Automotive Reports); Ford's product mix (1990-2008): 1) 1995-2007: SUVs, pick-up trucks, vans dominated sales (about 15% above industry average); 2008 - 1) shift production to cars, crossover vehicles (8/14 plants in North America build trucks, S.U.V.s, full-sized vans; expected to convert three assembly plants from truck-based products to cars); 2) realign factories to manufacture more fuel-efficient 4-cylinder, V-6 engines; 3) produce six of next European car models for United States market. (source: New York Times);