Ford Plans to Reduce Explorer Costs By $600 a Vehicle

DETROIT -- Jocelyn Parker writing for Dow Jones reported that Ford Motor Co. on Tuesday said it plans to cut its material costs per vehicle on its popular Explorer sport-utility vehicle.

During a conference call, Chief Financial Officer Allan Gilmour said the company will take out $600 per vehicle on Ford's 2003 Explorer.

Mr. Gilmour also said Ford will start a project before the end of the month in which it will simulate various kinds of downturns to see how it would impact the business.

"We are going to do modeling of our business at various levels of industry volume and see what the consequences are both for the income statement and the balance sheet and figure out what further actions we would be ready to take if one of those things do in fact (happen)," he said.

Chief Executive William Ford Jr. also said that the company is planning on a tough pricing environment next year even though it got better pricing on its vehicles in the third quarter.

"We built a plan [for 2003] around negative net pricing," Mr. Ford said. "I'd love to surprise on the upside, but I wouldn't count on it."

Mr. Ford said that net pricing per vehicle in the third quarter rose $600. The company was able to get that gain through higher sticker prices as well as better product mix, which included more expensive vehicles such as the Lincoln Navigator.