CHICAGO - Top executives of Ford Motor Co. maintained Friday that the automaker's turnaround plan is on pace despite a 12 percent decline in sales for the first five months of this year.
Although industry experts have questioned the progress of the "Way Forward" restructuring unveiled in January 2006, Chief Executive Alan Mulally said the plan is "pretty much on track."
Visiting the company's Chicago assembly plant to mark the return of the Ford Taurus, Mulally said some parts of the overhaul, related to cost cutting, are even ahead of schedule.
"The closures and the employment reductions to size the capacity to the real demand - we're a little bit ahead," he told reporters. "But generally (we're) on plan."
Financially, the No. 2 U.S. automaker has improved its grim situation through plant closures and layoffs, with its $282 million first-quarter loss a significant step forward from the staggering $12.7 billion deficit for 2006.
Its North American sales have continued to sag, however, and some analysts say its turnaround is trailing that of rival General Motors Corp.
Mark Fields, Ford's president of the Americas, said there is evidence the carmaker's industry position is stabilizing, citing Ford's market share of slightly more than 13 percent for the last six to nine months.
Ford has begun a marketing blitz for the Taurus that it hopes will boost sales, touting safety and affordability. The company calls it the safest full-size car in the United States, pointing to recent industry awards and engineering improvements aimed at consumers who place a higher priority on safety than in the past.
The Dearborn, Mich.-based company announced in February that it would revive the Taurus, which was one of its top brands in the 1980s and '90s before it faded into oblivion, and make it exclusively at its plant on the far south side of Chicago. A renamed and improved version of Ford's slow-selling Five Hundred sedan, the 2008 Taurus is starting to hit dealer showrooms.
"We haven't given any projections, but I think this vehicle's going to surprise a lot of people," Fields said.
In other changes, an upgraded version of the Freestyle crossover vehicle has been re-badged as the Taurus X, and the Mercury Montego, the Five Hundred's cousin, is being renamed the Sable.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said automakers have become more competitive in the past six months, but Ford still needs to show better sales results.
"They're making excellent progress on the cost side," he said. "But the revenue side is a real challenge. That's where we have to see some very significant movement."
Pete Hastings, an auto industry corporate bonds analyst with Morgan Keegan & Co., said much of Ford's sales decline can be attributed to its decision to back off on the unprofitable fleet market - rental car companies and bulk buyers.
"They've done a nice job with eliminating costs from the work force through the buyout program and a fairly decent job with respect to new model introduction, although they obviously face some tremendous headwinds with the current automotive market and the economy in general," Hastings said.