Rising gas prices and declining demand for large trucks are prompting Ford Motor Co., which reported a huge net loss in the second quarter released Thursday, to realign some of its North American production lines to build smaller, fuel-efficient cars. -
Ford reported from its head office in Dearborn, Mich., that its second-quarter results included a net loss of $8.7 billion US, or $3.88 US a share.
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Ford lost $15.3 billion in 2006 and 2007 combined, before posting a $100-million profit in the first quarter of this year. As gas prices continued to climb and truck sales collapsed, the company announced last May that it would be scaling back truck production.
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Ford has largely been relying on pickups and sport utility vehicles for profits in North America, but now the Michigan-based company is hoping to increase falling revenues by taking a page from its successful European operation and focusing on smaller cars.
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More consumers want to get rid of their gas-guzzling SUVs and trade them in for something smaller, a growing trend that has become obvious to Mohamed Bouchama, executive director of Car Help Canada, a Toronto-based company that helps consumers buy and sell their vehicles.
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"Especially people driving in the city. That's what they want, that's what they are looking for - a small car, fuel-efficient, easy to park and not expensive either," he said.
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Starting in December, Ford will retool two U.S. plants as well as one in Mexico to build subcompact and compact cars.
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Workers at Michigan Truck currently build Ford Expeditions and Lincoln Navigators.
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Ford's plant in Louisville, Ky., produces Explorer and Mercury Mountaineer SUVs, while the plant in Cuautitlán, Mexico, assembles F-series pickup trucks.