Ford is expected to announce on Monday that it will get out of the US minivan segment, in an attempt to exit unprofitable and flagging markets, according to two anonymous US Today sources ‘familiar with the plan’.
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The newspaper noted that Ford will lay out an overall restructuring plan that will include plant closures, layoffs and executive departures on Monday when it announces fourth-quarter earnings.
Ford spokesman Jon Harmon would not confirm a minivan announcement to USA Today but reportedly said the restructuring plan includes some changes to the company’s product line-up.
The paper said Ford is expected to post a profit for the year but lose money in North America – in the first three quarters it lost US$1.34bn there.
USA Today said Ford’s minivans have been weak performers in a crowded segment – last year, Freestar sales were down 25.1% from 2004 and Mercury Monterey sales were off 53.1%, according to Autodata.
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By GlobalDataFreestar, formerly known as Windstar, was remodelled for the 2004 model year, the paper noted. Consumer press reports just-auto saw when the revised model was launched were lukewarm at best.
If Ford quits making minivans, “What they’re essentially saying is, if you can’t be No. 1 or 2 in a segment, then it’s not worth being there,” David Cole, chairman of the Centre for Automotive Research told USA Today.
“We have to pick and choose where we want to compete,” Ford’s executive vice president and president of the Americas Mark Fields said in an interview last week, according to the paper. “The idea you have to be in all the segments, that’s an old way of thinking.”
USA Today noted that Ford already has announced that new products will be going into the plant where it currently makes the Freestar and Monterey minivans. The company announced earlier this month that it will add the new Ford Edge and Lincoln MKX crossover vehicles to the Oakville, Ontario, plant, starting production in October.
The paper added that Ford also is considering building a vehicle similar to a Fairlane concept shown at motor shows last year – that had three rows of seating but looked more like a tall station wagon than a minivan.
USA Today also said that General Motors might be thinking about leaving the minivan market, and is closing its Doraville, Geogia, plant that makes its minivans sometime in 2008.
The automaker is still trying to figure out what kind of vehicle should replace them, spokesman Tom Wilkinson told the paper. “The reality is, we’re looking at a lot of alternatives for people carriers,” he reportedly said.
Enthusiast publications and websites in the USA frequently single out Toyota and Honda minivans as ‘best in class’. Chrysler models lead the segment.
