FORD Motor Co's plan to stem losses by cutting jobs and closing plants is "ahead of schedule," Chief Executive Officer Alan Mulally has said.
Mulally didn't give specifics in his presentation to analysts on Friday. The Dearborn, Michigan-based company plans to shut nine plants by next year and 16 by 2012. It's also eliminating about 40,000 North American jobs under a restructuring announced last year, Bloomberg News reported.
Ford, the world's third-largest auto maker, stepped up cost-reduction efforts last year as it lost almost US$7 billion in the first three quarters, mainly because of its unprofitable North American auto unit. Ford announced its job-cut plan in January 2006 and accelerated its plant-closing schedule in September.
"Mulally was great and the old Ford management was the old Ford management," Brian Johnson, a New York-based analyst at Lehman Brothers Inc, said in an interview. "It's hard enough to turn the Queen Mary on a dime, let along the Titanic."
Ford is still reviewing what to do with its UK-based Jaguar and Land Rover units, Mulally said in response to a question. The auto maker has said it may sell some assets, and Executive Vice President Lewis Booth earlier last week said Ford is "down to the short list" of bidders for the Aston Martin unit. Jaguar, Land Rover and Aston Martin are all based in the UK and are part of Ford's Premier Automotive Group.
Mulally, whose hiring was announced in September, also said Ford continues to consolidate its US dealer network. It has about 4,300 Ford, Lincoln and Mercury dealers in the US market
"Clearly we have too many dealers," Mulally told analysts at a meeting in Dearborn. "It really manifests itself in metropolitan areas, where we have dealers competing against each other."
Ford began a plan to reduce the number of dealerships before Mulally took over. The company has said the effort is voluntary.
Ford's US market share has declined every year since 1995, when the company held 25.7 percent of sales. Its share was 17.5 percent last year, a drop of 1.1 percentage points from 2005. The auto maker's Ford, Lincoln and Mercury brands had 16.4 percent.
The company is counting on new models to help end its US sales decline. Ford will build a Lincoln version of the "people mover" vehicle it's developing to replace its minivans, Derrick Kuzak, the auto maker's worldwide product development chief, told analysts.
Ford said in September that it would make a Ford-brand version of the vehicle starting in 2008. The new model is to be built at the Oakville, Ontario, factory where Ford made Freestar and Monterey minivans. Minivan production ended last year.
Kuzak didn't discuss specific plans for the Lincoln version.
Ford trails General Motors Corp and Toyota Motor Corp in global sales.