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Ford cuts targets, plans
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December 21, 2000: 5:55 p.m. ET
Lowers 4Q EPS guidance by 10 cents; cuts 1Q production 9 percent from plans
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NEW YORK (CNNfn) - Ford Motor Co. warned Thursday it would miss fourth-quarter earnings estimates and announced a series of temporary closings of most North American plants early in the new year.
The company said it now expects to earn 64 cents a share, 10 cents below the 74 cents a share forecast of analysts surveyed by First Call and down from the 83 cents a share it earned a year earlier. The company blamed weather-related losses in North America and parts shortages outside North America for the current quarter's profit shortfall.
 The world's second-largest automaker had previously said it would meet reduced production goals through a cut in overtime rather than shutdowns. But Thursday's after-hours statement said it now plans deeper cuts, reducing production 9 percent from its previous plan. Overall production will be 1.05 million vehicles in the first quarter. North American plants are now set to produce 220,000 fewer vehicles than it did a year earlier, a 17 percent reduction.
"It's clear that U.S. economic growth is slowing," said Martin Inglis, vice president, Ford North America, "and surveys of consumer sentiment point to lower levels of spending in the future. The revised first-quarter plan is intended to align our U.S. inventories with consumer demand. We're making every effort to stay in front of the slowing demand curve."
Ford announced 15 of its plants will be shut down for at least a week in January, although four of those plants are set to be closed for two weeks. Further cuts are possible as well, said the company's statement.
"The production cuts are front-loaded in the quarter," said Inglis, "This gives us the flexibility to assess the economic picture again before the spring selling season."
News just the latest blow to industry outlook
The company did not give any new first quarter earnings guidance, although that appears certain to be lowered by analysts as well. First Call forecasts that Ford would earn 81 cents a share in next year's first quarter, down from 90 cents a share in the first quarter of 2000.
This is only the latest sign of trouble in the auto industry. DaimlerChrysler (DCX: Research, Estimates) had already warned about losses from its North American Chrysler Group unit and announced temporary plant closings here. It also replaced its chief executive in an effort to turn around the Chrysler unit.
General Motors Corp. (GM: Research, Estimates), the world's largest automaker, also lowered fourth-quarter guidance at the same time it announced 14,000 job cuts in North America and Europe and the discontinuation of Oldsmobile, the nation's oldest automobile brand.
Even before the current downturn in auto sales prompted profit and production cuts, Ford was hit by problems related to the August recall of 6.5 million Firestone brand tires primarily used on its vehicles, including its best selling sport/utility vehicle, the Explorer.
Shares of Ford (F: Research, Estimates) lost $1.19 to $23 in after-hours trading, after gaining $2.06 to $24.19 in regular-hours trading Thursday ahead of the announcement. 
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Analyst says hard landing hitting autos - Dec. 15, 2000
GM cuts jobs, Oldsmobile division - Dec. 12, 2000
Visteon warns on 4Q - Dec. 5, 2000
Auto sale fall hits profits, production - Dec. 1, 2000
GM cuts November sales target - Nov. 20, 2000
Daimler lowers Chrysler forecast - Nov. 17, 2000
Ford Explorer sales off - Oct. 31, 2000
DaimlerChrysler operating profit skids 80% as Chrysler Group sales slump - Oct. 26, 2000
Ford 3Q beats estimate, but falls from year-ago figure - Oct. 18, 2000
GM earnings forecasts hit the skids - Oct. 13, 2000
GM posts record 3Q EPS - Oct. 12, 2000
Special report: Firestone Ford Recall
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