Ford Stops GT Production in Belt Tightening

Dearborn MI February 6, 2006; Bloomberg News reported that Ford Motor Co. will end production of the $150,000 GT sports car this year and scrap plans for a high- performance sport-utility vehicle to cut costs and reduce losses in North America.

Ford, the second-largest U.S. automaker, sold just 1,032 of the GTs last year after starting production in 2003 as part of its centennial celebration. The Dearborn, Michigan-based company is also canceling the Explorer Sport Trac Adrenalin, a 390-horsepower SUV, spokesman Jon Harmon said.

“They couldn’t make money on volume like that,” said David Healy, a Burnham Securities Inc. analyst in Sierra Vista, Arizona. “It was a loss leader.”

Chief Executive Officer William Clay Ford Jr. approved production of the GT in 2002, a month after he announced his first restructuring plan for the company. The GT was part of Ford Motor’s attempt at an image makeover, which also included television advertisements featuring the CEO. The automaker began running a new series of Bill Ford advertisements last year, emphasizing a commitment to making more fuel-efficient vehicles.

“We always said it was a twomodel-year run” for the GT, Harmon said. The sports car is produced at a Wixom, Michigan, plant that will be closed in 2007 as part of Bill Ford’s second restructuring plan, announced last week.

The GT was based on the GT40 car that Ford raced in the 1960s at the 24-hour endurance competition at Le Mans, France. The Ford car won the annual event from 1966 through 1969.

Ford showed a prototype of the new GT at the 2002 North American International Auto Show in Detroit. Bill Ford ordered the first production GT.

“It was meant to be a limitedproduction car and it had run its course,” said auto analyst Erich Merkle at consulting firm IRN Inc. in Grand Rapids, Michigan.

“It was one of those vehicles that look good in the ads.”

The Detroit News, which reported the end of GT production earlier today, said that employees at Wixom were told work on the GT would end in September.

The Wixom plant currently makes the GT and the Lincoln LS and Town Car sedans. The company plans to end production of the LS this year. Wixom stopped production of the Thunderbird car last year.

The factory’s closing is part of Ford’s plan to cut as many as 30,000 jobs in North America.

The company had a pretax loss of $1.6 billion in North America in 2005 and has lost U.S. market share every year since 1995.

The Sport Trac Adrenalin was shown last year at the New York auto show as a prototype, and Ford said it planned to produce the SUV next year. Sales of standard Explorer SUVs fell 29 percent in 2005.