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Ford crisis: Europe to the rescue?

2008-07-23 09:00

The Ford Kuga SUV is to be launched in the United States.

Ford plans to revamp some US plants and bring six small vehicles to the US market from overseas to meet customers' growing demand for more fuel-efficient options, a person briefed on the company's plans said.

Ford has no immediate plans to close US plants despite overcapacity in a slumping market, the person said. Instead, the carmaker will retool plants to increase production of smaller cars and engines. The person requested anonymity because Ford is not confirming details until Thursday, when it releases second-quarter earnings.

The moves will further accelerate Ford's efforts to ease its dependence on trucks, sport utility vehicles and vans, which accounted for 45% of its sales in the first half of this year. Ford's US sales dropped 14% in the first six months of 2008 as consumers
shocked by rising gas prices sought smaller vehicles.

Ford announced last month that it was cutting truck and SUV production for the rest of the year and increasing production of the Focus small car and Ford Escape and Mercury Mariner small SUVs. It also delayed the launch of its new F-150 pickup until fall.

In June, Ford revealed that it will build the global Fiesta subcompact at its factory in Cuautitlan, Mexico, which has been making trucks, and that it will build the European Focus small car in North America. Both cars are set to go on sale in the US in 2010.

The company now plans to bring even more vehicles over from Europe and produce them in North America, according to the person briefed on the plans. They could include the Kuga small crossover vehicle, the Transit Connect and C-Max small vans and the next-generation Mondeo midsize car, which likely would replace the current Ford Fusion and Mercury Milan.

Some factories will be retooled to produce more fuel-efficient four- and six-cylinder engines and more efficient transmissions for the new vehicles.

Also, to meet high demand for the current Focus small car, Ford will retool part of the Michigan Truck plant in the Detroit suburb of Wayne to build Focus bodies. The bodies would then be shipped next door to the Wayne Assembly plant, where the Focus is made, the person said.

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