Ford sales still fall short of goals

Ford sales still fall short of goals
http://www.detnews.com/apps/pbcs.dll...705210304/1148

Morale at Ford Motor Co. has improved slightly in the wake of this
year's massive buyout program, but the automaker's U.S. retail sales
continue to fall short of internal forecasts, according to the company's
latest monthly report card distributed to employees last week.

The document, titled "Report Card: North America May 2007" and obtained
by The Detroit News, shows that, in the first quarter of the year, 60
percent of Ford employees were "looking forward to the future as Ford
employees." That was up four percentage points from the company's last
quarterly survey of employee morale.

However, the poll found that less than 45 percent of Ford workers
believe the automaker's "Way Forward" turnaround plan will succeed.
Ford's poor performance on the retail sales front suggests their
concerns may be justified.

According to the document, Ford's April retail market share in the
United States dropped to just 9.7 percent -- nearly a full percentage
point lower than the company had projected and far from its full-year
goal of 10.5 percent to 11 percent. Ford blamed the decline on "the weak
housing market and higher fuel prices." Truck and sport utility vehicle
sales were particularly hard-hit.

Those numbers aren't likely to reverse anytime soon, said Jesse Toprak,
chief economist for Edmunds.com. Edmunds, which uses information on
consumer demand, sales forecasts and future product plans to predict
automaker market share, sees Ford continuing to slide in the near future
because it remains too reliant on the cooling segments of large trucks
and sport utility vehicles.

"At least they're realizing they cannot keep going blindly after market
share," Toprak said. "Their overall strategy of how to approach the U.S.
market has to change. You can make money with less market share."

Ford has managed to keep its share of the retail market relatively
stable, company spokesman Jim Cain said. Ford also has moved to create a
portfolio that offers as many cars and crossovers as trucks and large
SUVs -- a move that should help make the automaker less vulnerable to
gas and housing issues.

"We have launched a raft of new fuel-efficient products," Cain said. "It
takes time to turn a ship."

Also according to the report card, Ford missed its material cost
reduction target for the month.

"Material cost reductions through April were 5 percent below forecast,"
the report card states, blaming the shortfall on ongoing weakness among
Ford suppliers. "Some negotiations have been extended due to continued
distress in the supply base."

On the plus side, Ford said it continues to make progress on selling off
the former Visteon Corp. facilities it took back as part of a 2005
bailout of its former parts subsidiary. Ford lost $12.6 billion last year.

The Dearborn automaker is in the midst of a sweeping restructuring plan
that aims to restore the automaker to profitability by 2009. Successful
new products and a focused recovery plan are boosting employee morale,
Ford spokesman Oscar Suris said.

"The trend will continue," he said, "if we keep doing our jobs."