Ford Trucks For Sale

The storm battering Detroit intensified yesterday with Ford Motor Co. offering a bleak sales outlook and its second major production cut in less than a month, which will wipe out 300 jobs at its Canadian operations.

Ford said it will delay introduction of a new generation of its F-series pickup by two months, cut production of trucks and truck-based sport utility vehicles even further than it announced less than a month ago and will have difficulty meeting its previous target of breaking even on a company-wide basis next year.

It also reiterated earlier plans to boost output of smaller cars and crossover utilities, including the CUVs made in Oakville, Ont.

“We view the move to smaller, more fuel-efficient vehicles as permanent and we are responding to customer demand,” Ford president Alan Mulally said in a statement.

Union officials said slashing output of trucks and SUVs means 300 jobs will be lost at the company’s Windsor, Ont., engine facility, which puts together V-8 and V-10 engines for pickups and SUVs.

There are about 2,500 Canadian Auto Workers members now at Ford’s engine plants and joint ventures in the city and 738 on layoff, Mike Vince, president of local 200 in Windsor, said yesterday.

The crisis in Detroit is spilling over to parts makers in Canada as well, with Magna International Inc. announcing this week that it will slash 400 jobs or one-quarter of the work force at a plant in St. Thomas, Ont., that makes frames for GM’s pickups. GM revealed in turn that it is delaying development of its next generation of pickup trucks to focus more of its resources on cars and other vehicles that use less gas.

Magna’s U.S. plants will take a hit with the Ford announcement because the parts giant makes many components for heavy-duty pickups assembled at one Ford plant in Kentucky and frames for the Explorer SUV built at another plant in that state. Output is being throttled back at both plants. It will trim a shift of Explorer production and cut the assembly line speed at the pickup plant.

Previous cuts by the Detroit Three are one of the causes of parts sector employment in Canada plunging by more than 20,000 jobs to 81,676 workers last month from a peak reached in 2001, industry analyst Dennis DesRosiers said in a report yesterday.

The parts sector will not disappear, said Mr. DesRosiers, president of DesRosiers Automotive Consultants Inc.

“The remaining parts sector should be able to recover as the cyclical downturn in the industry recovers,” Mr. DesRosiers said.

The Ford announcement capped a brutal week for the Detroit Three that included forecasts by several Wall Street analysts and the chairman of Chrysler LLC that sales in the U.S. market will plunge to their lowest level this month in more than a decade.

Underlining the growing danger to Detroit was Ford’s new statement that its perennially profitable credit arm will report a pretax loss this year and will not pay a dividend to its parent company.

Regulator filings show Ford Motor Credit Co. has posted a profit annually since 1989, which is as far back as Securities and Exchange Commission documents go.

Two influential U.S. ratings agencies added to the pressure, with Standard & Poor’s Corp. placing ratings for all three companies on credit watch with negative implications and Moody’s Investors Service Inc. cutting Ford’s outlook to negative from stable.

Both rating agencies are worried about the cash drain the severe slump in truck and SUV sales is causing.

“We have renewed concerns about all three auto makers’ future cash outflows in light of the prospects for U.S. sales for the rest of 2008 and into 2009,” said Standard & Poor’s credit analyst Robert Schulz.

Deteriorating fundamentals could reduce liquidity to undesirable levels by the second half of next year, Standard & Poor’s added.