US Auto Industry in Meltdown as Ford Loses Record $8.7 BillionCompanies / US Auto's Jul 24, 2008 - 12:00 PM GMT
The Ford motor companies stock price fell sharply by more than 10% following news of a worse than expected second quarter record loss of $8.7 billion, this follows a first quarter profit of $100 million. Ford has been witnessing a near meltdown in sales from a year earlier with auto sales down 28%, and truck sales down 36%, as following the surge in gas prices the once profitable SUV's have now become a liability by clogging up dealer forecourts with unsold inventory and thus contributing to the sales meltdown.
The stock price seems destined towards a break of 23 year lows seen at the start of this month..
The company also saw revenues plummet from $44.2 billion to 38.6 billion. Ford announced a series of initiatives in an attempt at revive the auto companies fortunes including:
• Developing new fuel efficient small cars and crossovers to North American product lineup. This includes six European small vehicles that are coming to the North American market.
• Converting three large truck and SUV plants to small car factories with retooling to begin this December.
• Upgrading of the Ford, Lincoln and Mercury models by end of 2010.
• Doubling hybrid vehicle production and models during 2009.
• Doubling the capacity for North American four-cylinder engines by 2011.
• Ford also aims to improve fuel economy on every new model.
By Nadeem Walayat
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