In announcing the gutsy move, Ford CEO Jim Hackett said in addition to whacking the cars, at the same time the company plans to almost double its cost-cutting goal to $25.5 billion from the $14 billion he announced in October. The company plans to release the new Focus crossover next year.
Specifically, Ford said that by 2020 nearly 90% of the Ford portfolio in North America will be trucks, SUVs and commercial vehicles. This change includes financial incentives like low-monthly payments, trade-in value of cars as well as the improvement of several factors from more fuel-efficient and better-equipped trucks and SUVs to improved safety ratings and ride qualities of these vehicles.
If you are a fan of Ford automobiles you better get ready to just have a couple of choices in vehicle selection in the near future. Ford and other automakers have been left to make very hard decisions regarding their future auto lineups.
Ford made $1.74 billion from January through March, or 43 cents per share, compared with $1.59 billion, or 40 cents per share a year ago. Other models, including the Taurus, the original Ford Focus, the Fiesta and the Fusion, will no longer be available in the United States or Canada. Ford expects the measures to enable it to achieve a global profit margin of 8 percent by 2020, two years earlier than it previously forecast, he said.
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Despite the higher profit, Ford's adjusted pretax profit margin fell to 5.2 percent from 6.4 percent in the same quarter in 2017.
The news comes as Ford announced a $1.7 billion profit for the first quarter of 2018. Shanks said the business lines losing money were mainly smaller vehicles. One in five Ford products sold in Europe during Q1 2018 were SUVs, with the Kuga outselling the Mondeo three to one during that period, at 46,100 units.
Michelle Krebs, executive analyst at AutoTrader.com, said Ford's move is no shock.
The company will continue to manufacture Mustangs and a compact Focus crossover vehicle. At the time, FCA CEO Sergio Marchionne defended the move to investors as a quick way to increase production of more profitable Jeeps and Ram pickups. And now that the little pony has grown up, a new generation of drivers will have the thrill of sitting behind the wheel of this writer's favorite Ford vehicle. To get there, the automaker is ready to take steps including forsaking certain categories and markets.