Ford announces rebuilding plans after stark second-quarter-loss

Yesterday's announcement from Ford regarding a substantial second-quarter loss followed weeks of speculation by bloggers and car experts about what Ford will do to improve their standing with American consumers.

An official press release sent to us yesterday afternoon from Ford detailed the company's new aggressive product plan, which focuses on retooling several plants to produce the new, small, fuel-efficient vehicles Ford will pursue for the next few years.

We've scoured the press release for important information, and we're bringing a comprehensive view of Ford's new strategy to you.

Ford will convert three existing North American truck and SUV plants for small car production, with the first conversion beginning this December.

The Wayne, Michigan Truck Plant will be the first plant to see this transformation. Ford will also be doing somewhat of an intricate musical chairs with various other plants to cut costs while continuing to maintain a high level of vehicle production.

The moves are in addition to Ford's announcements in May and June that it is reducing its North American production plans for large trucks and SUVs for the remainder of 2008, as well as increasing production of smaller cars and crossovers. [ . . . ]

Ford is adding several new North American products in the near- and mid-term, and shifting from a primary emphasis on large trucks and SUVs to smaller and more fuel-efficient vehicles. By the end of 2010, two-thirds of spending will be on cars and crossovers – up from one-half today.

Again, the "musical chairs" effect. As we mentioned in a previous post, Ford's realization that it must begin to rely on other vehicles besides their staple trucks and SUVs will ultimately benefit both the company and its customers, who are seeking a limited amount of hybrids and fuel-efficient passenger cars. And the spending increase on cars and crossovers certainly represents a dynamic shift in the classic "Built Ford Tough" mindset that has accompanied a long history of producing the popular F-Series. Further proof of this sentiment is found later in the release:

The new products include six European small vehicles to be introduced in North America by the end of 2012. Ford's acclaimed European products are set apart by their world-class driving dynamics, exciting design and outstanding quality.

"While we have no intention of giving up our longtime truck leadership, we are creating a new Ford in North America on a foundation of small, fuel-efficient cars and crossovers that will set new standards for quality, fuel economy, product features and refinement," Fields said.

It can't get much more obvious that Ford has opened its eyes to consumer demands and outside economic factors. Again, this is no surprise, and we've already posted on the effects of bringing European cars to America.

Finally, CEO Alan Mulally's ambitious "One Ford" global product development vision got plenty of attention in the release. According the the release, the "One Ford" vision will allow for increased delivery of vehicles worldwide and reduce costs by allowing for the increased use of parts and systems.

Bottom Line:
There will always be people who buy the F-150, Ford's most well-known and widely available truck. But Ford is making a smart (though some may argue, delayed) move that will allow them to remain competitive. One thing Service Motors would like to see is increased focus on Hybrid technologies. While Ford currently supports hybrid models of the Ford Escape and the Mercury Mountaineer, customers are itching for more applications of the technology.