DEARBORN, Mich. — Bleeding cash and with its very survival uncertain, Ford Motor Co., an icon of American automaking, will try to import some of its success from across the Atlantic.
Ford reported its worst-ever quarterly loss Thursday and announced plans to bring over six small, fuel-efficient cars it makes in Europe and start selling them in North America, where Ford is losing billions on its truck-heavy lineup. Ford will retool plants to make the smaller cars.
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The company burned through nearly $11 billion of its cash stockpile in the past year and reported a second-quarter loss of $8.7 billion.
The automaker said that the Louisville Assembly Plant, which makes the Ford Explorer midsize SUV, will be getting a flexible body shop and begin making smaller, fuel-efficient cars to sell in the United States by 2011.
The new vehicles will be similar to the European Focus.
Ford is also moving production of the Lincoln Navigator and Ford Expedition from Michigan to the Kentucky Truck Plant in early 2009. The Kentucky Truck Plant now makes Ford Super Duty pickups.
Ford is trying to save itself by quickly morphing from a truck company into a car company. But the help from Europe won't arrive until 2010. It takes time to retool U.S. plants, and importing the cars directly is too costly.
Industry watchers wonder whether Ford has enough cash to survive until then.
”You have the gap before the plan can be fully executed,“ said Jeff Schuster, executive director of global forecasting for J.D. Power and Associates. ”You kind of have to weather the conditions, and you have to weather the fact that you're still the old company in transition.“
Ford has successfully sold cars in Europe for years, and it made billions of dollars selling trucks to Americans. But U.S. drivers have recoiled this year from high gas prices and bolted for smaller cars.
Most of the European models will be built in North America. The Fiesta subcompact will be built in Mexico, the European Focus will be built in Kentucky and Michigan, and the Transit Connect small van will be imported from Turkey.
Past efforts by U.S. automakers to bring in European cars have flopped, but Ford CEO Alan Mulally said the U.S. market is vastly different today, with gas at $4 and consumers cleaning small cars out of showrooms.
”They want the vehicles to be neat and have a lot of features,“ Mulally told reporters and industry analysts Thursday on a conference call. ”We have seen this and the success of this in Europe and around the world.“
Louisville Mayor Jerry Abramson said Ford will invest $100 million in the Kentucky Truck Plant. The investment will give flexibility to the city's two Ford plants that will keep production lines moving well into the future, Kentucky Gov. Steve Beshear said.
”The company is betting the success of its future and the future of the auto industry on Louisville, Ky.,“ Beshear said.
The announcement Thursday marks a turnaround for the Louisville plants since 2006, when they were considered by Ford as candidates for closure.
”When it comes to Ford Motor Co., Louisville has had more lives than most cats when you consider what we've had to go through,“ Beshear said.
Abramson said the city and state used financial incentives to lure Ford into investing in the local plants. Those incentives haven't been finished, but should be made public in a few weeks, he said. Also, the city and state are working on a job retraining package for Ford employees, Abramson said.
Ford gave no forecast for a return to black ink, but Chief Financial Officer Don Leclair said Ford had enough cash and credit to make it through the downturn. He said he didn't expect a recovery to start until 2010.
More job cuts are likely. The company has already announced plans to cut its salaried work force expenses by 15 percent, with 200 workers leaving the company as of June 30.