Ford Cuts Production by 41.9 Percent, Hopes to Reduce $10.4 Billion in Debt

Ford wants to hold on to the little money it has left

Ford Motor has decided to cut its North American output by 41.9 percent in order to align its production to the decreasing consumer demands. Total number of vehicles that will exit the company's assembly lines will amount to 800,000 light vehicles, down from the 1,337,153 in the same period of 2008, Autonews reported.

"A key element of our strategy to build our reputation and improve resale values is to align our production with consumer demand. Our disciplined approach to the market in these challenging times helps us minimize costly incentives which erode brand value," Ken Czubay, Ford marketing vice president was quoted as saying by the source.

The measure will bring down Ford's first half production output, compared to the same period of the last year. The American manufacturer built 418,264 vehicles in the third quarter and 428,112 in the fourth quarter of the year past.

The second-quarter 43 percent scaledown for small cars will bring the total to 135,000 units, compared to 237,000 in 2008. Light trucks production is planned to go down 35 percent, to 290,000 from 448,000 units.

Ford will also introduce a set of concessions for its debt holders, through which it hopes to swap company stock and cash to bring debt down by $10.4 billion. The measures are meant to ease Ford's access to a $9 billion line of credit should the need arise.

"The debt restructuring plan we are announcing today is a critical step in Ford's overall transformation, We are continuing to work with all of our stakeholders, including employees, dealers and suppliers, to secure Ford's future in this difficult economic environment.," Allan Mulally, Ford CEO said in a statement.