Tuesday, July 22, 2008

Ford Has a Smaller Idea

Ford Motor Company looks to the little cars.

The struggling automaker, reacting to what it sees as a rapid and permanent shift in consumer tastes brought on by high gas prices, plans to unveil its new direction on Thursday, when it will report quarterly earnings.

Among the changes, Ford is expected to announce that it will convert three of its North American assembly plants from trucks to cars, according to people familiar with the plans.

And as part of the huge bet it is placing on the future direction of the troubled American auto industry, Ford will realign factories to manufacture more fuel-efficient engines and produce six of its next European car models for the United States market.

The company will also end speculation about its Mercury division by making the brand an integral part of its new small-car strategy, according to these people, who spoke on the condition that they not be quoted by name because of the timing of the official announcement on Thursday.

The sweeping changes are the result of months of strategic discussions by Ford executives, and represent a dramatic response to the woes afflicting Detroit’s automakers.

As long as they don’t bring back the Pinto…

Also known as the Ford Flambé.