Years of record sale squandered

Ford COO sees difficult time for industryTue Sep 20, 2005 10:26 AM ET
DETROIT (Reuters) - Ford Motor Co.'s chief operating officer on Tuesday declined to predict when the struggling automaker's North American operations would again be profitable, but said he sees difficult times for the whole industry in the next 18 to 24 months.
"I think the nature of competition in the marketplace is very, very challenging for all of us," Jim Padilla said at the Reuters Autos Summit in Detroit.
Strong competition, soaring health-care and raw material costs, and a slide in U.S marketshare has forced the second-largest U.S. automaker to slash its profit forecast twice this year. Ford's North American auto operations swung to a pretax loss of $1.21 billion, including charges, in the second quarter.
The automaker also said it would no longer provide a quarterly financial forecast, echoing a move by cross-town rival General Motors Corp.
The automaker has said it will announce a restructuring plan this fall and has not ruled out deeper job cuts in its salaried workforce or the closing of manufacturing plants.
This would be the second time that Ford will put together a financial turnaround plan. A multi-year restructuring program was launched in 2002, which included 35,000 job cuts, the shuttering about seven North American plants and the elimination of unprofitable vehicle models.
"I don't think it went wrong," Padilla said, referring to the 2002 plan. "None of us anticipated the aggressive pricing in the marketplace."
"When we put our plan together we assumed that incentives and the like would be in the range of 13 to 14 percent," he said. "Reality is that incentives has been 18 to 20 percent for the last several years."