Southfield (WWJ) -- Ford executives are preparing plans to retool some U.S. plants to produce small passenger cars that the company has been making and selling mainly in Europe.
The Wall Street Journal, quoting people familiar with the matter, reported Saturday the details could be outlined Thursday when the Dearborn-based automaker issues its second-quarter earnings report.
Ford is expected to report a loss in the second quarter and lose money for all of 2008. It had net income of $100 million in the first quarter.
The plan is aimed at helping the automaker increase production of fuel-efficient cars in North America in response to the rise in gas prices.
Some people familiar with the talks told the Journal the move was pushed by Chief Executive Alan Mulally and met resistance from others in the company. Some executives questioned whether Ford can meet the timetable for the effort -- possibly as soon as 18 months -- and worried it could ultimately fail, as did previous efforts by Ford to sell European models in the U.S., according to the Journal. But Mr. Mulally, who spent his career at Boeing Co. before taking over the second-largest U.S. auto maker in 2006, decided to push ahead.
Ford has looked at several European models to bring to the U.S, including the Mondeo midsize sedan and its European version of the Focus.
WWJ auto analyst John McElroy says it makes alot of sense and is one of the "fastest ways to downsize its fleet of vehicles and make them more fuel efficient."
With gas over $4 a gallon, buyers have been switching to to small cars and abandoning the trucks and sport-utility vehicles the Big Three rely on for most of their North American revenue.
The Wall Street Journal says Ford's effort to bring vehicles from Europe to the U.S. mirrors a similar move by Toyota to produce more cars and fewer trucks in the U.S. Toyota recently announced it will use a Mississippi plant now under construction to make the Prius hybrid instead of an SUV, as it had originally planned.
On Tuesday, General Motors outlined plans to cuts costs by $10 billion over the next 18 months. GM hasn't announced plans to convert truck plants to car production, or move production of some of the cars it makes overseas to U.S. factories.
GM already imports into the U.S. one compact that it assembles in Europe: the Saturn Astra. But analysts believe GM loses money on each Astra it sells in the U.S. because of the weak dollar.
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