Ford accelerates cost-cutting plan, will drop most USA sedans

Ford accelerates cost-cutting plan, will drop most USA sedans

Ford accelerates cost-cutting plan, will drop most USA sedans

The company has previously hinted at scaling back in its consumer vehicle department in favor of two other markets: trucks and SUVs.

In March, executives at Ford unveiled new ambitious plans for shifting the struggling carmaker's product portfolio from cars to SUVs, increase the number of hybrid as well as fully-electric vehicles and lower the costs of development and manufacturing with the goal of boosting profits and the share price of the automaker.

Ford said Wednesday - when it announced first-quarter results - it's aiming for an additional $11.5 billion in cost cuts and efficiencies, bringing the total to $25.5 billion expected by 2022.

DETROIT - Ford Motor Co. on Wednesday said it plans to stop selling all Ford brand sedans in North America and that it is almost doubling its cost-cutting target by 2022 from the plan it laid out.

One of North America's largest vehicle makers is shrinking its product line to save money and stay competitive in the auto market, company officials said.

In its first-quarter statement on Wednesday, the company said it will only sell two cars for the US market within the "next few years" and that it will "not invest in next generations of traditional Ford sedans for North America". The 9% increase in quarterly profit can be nearly entirely attributed to a drop in the automaker's effective tax rate to 9% from 28.6%, Ford officials said. Ford CEO Jim Hackett confirmed the plan during the company's earnings call.

Ford plans to no longer sell the Fiesta, Taurus, Fusion and the regular Focus in the USA and Canada.

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Ford's decision to pull back on auto production reflects a shift in consumer sentiment that has had an impact across the automotive industry. In 2017 the company's pretax profit fell to $8.4 billion from $10.3 billion.

The announcement of the turnaround plans come as Ford reported further signs of difficulty in the first quarter of 2018.

The lion's share of the automaker's quarterly profit was driven by high-margin pickup trucks and SUVs in North America.

Along with those government restrictions, and based on the way consumers were drifting towards European and Japanese imports, American manufacturers thought that by pinching pennies, they'd turn a profit. Ford expects that in 2020, over 90% of vehicles it sells will be trucks, SUVs or commercial vehicles.

What vehicles will end up being eliminated according to CNN-Money?

The company is also reviving two of its historic vehicles: the Ranger pickup, which will return in 2019, and the Bronco SUV, which will return to the USA market in 2020.

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