SEATTLE (Thomson Financial) - Ford Motor Co could increase the pace of cost-cutting should a slowing US economy threaten key financial targets in 2008 and 2009, the Wall Street Journal, quoting the head of the carmaker's North and South American operations.
Mark Fields said the group has held down fourth-quarter production to avoid building excees inventory because of recent weak job data and credit market turmoil.
'If we see weakness on the revenue side, we have to take up the slack on the cost side,' Fields said, adding Ford adjusts its plans from month to month.
-- The head of Ford Motor Co.'s North and South American operations said the company could accelerate cost cutting if a slowing U.S. economy puts the auto maker at risk of missing key financial goals in 2008 and 2009. 'There's more risk than there is opportunity going forward' for the U.S. auto market amid uncertainty about the housing market and job growth, said Ford Executive Vice President Mark Fields in an interview here Monday.
Mr. Fields said recent weak job numbers and the turmoil in the debt and home mortgage markets have led Ford to hold down fourth quarter production to avoid building excess inventory. If it appeared that the company could miss key goals such as cutting operating costs by $5 billion by next year or regaining profitability in North America by 2009, 'we'll adjust the plan accordingly,' Mr. Fields said. 'If we see weakness on the revenue side, we have to take up the slack on the cost side,' he said. Mr. Fields said Ford adjusts its plans month to month. He said that as of now, the company's North American turnaround is on track to meet the 2008 cost-cutting target and 2009 profitability goal. Mr. Fields said Ford's decision to cut back on bulk sales to daily rental fleets is a major reason for the company's recent steep declines in monthly sales in the U.S. But Mr. Fields said Ford's share of sales to individual consumers in the U.S. has 'stabilized' at about 13%. 'We've been really disciplined' about fleet sales and inventory, Mr. Fields said.
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