- The Washington Times - Friday, March 14, 2003

DETROIT, March 14 (UPI) — Slowing sales and uncertainty over Iraq prompted the Ford Motor Co. to slash second-quarter production a record 17 percent but rival GM is more optimistic demand will bounce back if any hostilities ended quickly.

Ford announced its North American plants would build 980,000 vehicles April through June compared to 1.176 million vehicles produced in the same quarter of 2002. The world's No. 2 automaker is sticking with first-quarter plans to produce 1.035 million passenger cars, trucks, vans, minivans and sport-utility vehicles.

Sales analysis manager George Pipas said Ford was "building to sales" and would make 665,000 light trucks in the second quarter.

"Our strategy in this period of uncertainty is to keep our eye on the full-year outlook," Pipas told a telephone conference call Thursday. "Consumer confidence has slipped reflecting both concerns about a looming war in the Middle East and signs of deterioration in the job market."

Ford, GM and Chrysler expect industrywide sales of about 16.2 million vehicles in North America this year. CMS Worldwide projects sales could reach 16.6 million if war is averted but drop to 15.2 million units in the event of an extended conflict. Marketing studies show nearly 20 percent of prospective buyers have delayed the purchase of a new vehicle because of war jitters. General Motors earlier this month announced it would cut second-quarter production by 10.5 percent from last year's 1.553 million level, signaling the world's largest automaker remains optimistic of a quick recovery in demand in the event of a short war.

Ford will spend about a month retooling its plant in Norfolk, Va., as it prepares to introduce the all-new 2004 F-150 pickup and the production cut will help to reduce inventories of 2003 models.

The 17 percent production cut amounts to about one-sixth of the company's production and is one of the largest production cutbacks in Ford history. Production was ramped up last fall to meet demand after sales spiked on offers of zero-percent interest loans.

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