Delaying the 2009 F-150 is big for Ford
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This is a huge announcement. Ford said late Friday that it would delay introduction of the 2009 Ford F-150 line by about two months, to late fall. The reason is obvious -- dealers have to clear their lots of the current F-150 before they compete with themselves with the new Ford truck. Suburban cowboys have evacuated themselves from the fancy pickup market, and the core buyers -- construction workers and the like -- have little work, and no reason to trade in their old trucks.
A few days ago, I wrote about Chrysler's Bob Nardelli warning his employees that the U.S. automotive market in 2008 is turning out to be far worse than even his pessimistic, earlier predictions. At this rate, I suggested, it's becoming hard to imagine that all three, General Motors, Ford Motor and Chrysler will be around to sell cars and trucks by the middle of the next decade.
Chrysler has reiterated Cerberus' commitment to making that newly privatized automaker remain viable. Meanwhile, Ford has Kirk Kerkorian's Tracinda breathing down its neck. So now I'm suggesting it's Ford that's in the most trouble? Not necessarily. The point is that Ford's announcement points out how all three are up to their eyeballs in new product vs. a crappy economy and have to quickly shift from truck and SUV production to small-car production. Imports selling here aren't having a good time of it, either.
Ford now expects the total U.S. market to be between 14.7- and 15.2-million cars and trucks in 2008, down from an earlier prediction of 15.0- to 15.4-million cars and trucks. It plans to produce 475,000 in the third quarter, down about 50,000 from previous projections and 25-percent fewer units than in the third-quarter '07. Its plans for 550,000 to 590,000 in the fourth quarter, which will include full production of the new truck, is 40,000 fewer than earlier projections. It will cut production mostly at truck and SUV factories. A Mexican plant that now makes trucks will ramp down production late this year in anticipation of a switch to Fiesta production there in 2010.
Ford says 2008 financial results will be worse than 2007's $2.7-billion loss, with more cash flow than expected (switching production from trucks to cars costs money). Unless the market improves, Ford says, it will not break even by '09.
Defenders say the Detroit Three's sudden switch this year from trucks to cars was planned, that GM, Ford and Chrysler anticipated the changing market at least a couple of years ago. It's true that it would take any automaker about that long to make such changes. But the quickly deflating market and the quick run-up in gasoline prices has, indeed, caught them off-guard (same for Toyota, which is stuck trying to sell its shiny new, costly Tundra).
In any semi-normal year, Ford would have tried to move up introduction of a new truck. Even when consumers switch from trucks to cars, a new model as important as the F-150 would otherwise guarantee a bump in sales. The writing is on the wall: even good design and innovation won't help the new F-150 this year.
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