Ford To Squeeze Another $1,000 From F-150 Cost - Hey Boys Don't Squeeze Out the Quailty

DETROIT, Dec 17, 2003; Justin Hyde writing for Reuters reported that Ford Motor Co. said on Wednesday it would shave about $1,000 in production costs from the Ford F-150 pickup, its best-selling vehicle and a key driver of its turnaround plan, by the end of 2004.

The redesign of the F-150 has faced criticism from analysts for adding $1,300 to $2,000 more in costs per vehicle than the previous model. Ford executives have said they planned to start reducing the F-150's costs after the new 2004 model went into production earlier this year, but had not given specific targets; analysts had

"By the end of the 2004 calendar year, we expect to reduce the F-150 costs by about $1,000 a unit when compared to the initial production," Ford Chief Financial Officer Don Leclair told analysts in a conference call.

Leclair said the reductions would come from lower parts costs, more efficient manufacturing, and design changes. He said some of the changes had already been put into place, but that all of the moves would not be noticeable to customers.

Ford's shares, already trading at their highest since July 2002, rose after the conference call and were up 35 cents, or 2.4 percent, at $14.70 on the New York Stock Exchange.

The automaker has been touting the early success of the redesigned F-150, which has boosted sales and transaction prices as customers ordered a richer mix of options. Ford said the F-150's average price in November was $27,590, about 11 percent higher than a year ago. Steve Lyons, head of the Ford Division, expected F-Series sales to rise more than 10 percent this month due to the new F-150.

Earlier this month, Ford began offering its first blanket cash rebate on the F-150, but Ford executives said the truck's incentive costs had been essentially flat for the past two months, and were still well below competitors from General Motors Corp. and DaimlerChrysler AG's Chrysler arm.

Ford executives have called the new F-150 the most important vehicle launch in the company's history.