Ford sales down as it faces labour talks

FE Team | Published: October 04, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

DETROIT, Oct 3 (AP): Ford Motor Co has something else to bring to the table in its ongoing contract talks with the United Auto Workers union: A dismal September sales report.
Ford's US sales plunged 21 per cent last month as the automaker continued sharp reductions in sales to rental car fleets. Toyota Motor Corp outpaced Ford for the month and for the January-September period, continuing its drive to replace Ford as the nation's No 2 automaker in sales after General Motors Corp.
Overall industry sales were down 3 per cent in September, according to Autodata Corp GM, Honda Motor Co and Nissan Motor Co all saw increases thanks to hot-selling vehicles, while Toyota and Chrysler LLC were down.
The sales reports released Tuesday come as Ford and the UAW are trying to hammer out a new labour agreement. The UAW reached a tentative agreement with GM last week and is now negotiating with Ford and Chrysler to see if those companies will match GM's terms. The UAW hasn't yet said which automaker will go next or if it will negotiate with Ford and Chrysler simultaneously.
Some analysts have suggested Ford is the weakest of the three during this round of talks and may seek more concessions from the UAW. The company lost $12.6 billion last year, and September's numbers could add fuel to its arguments.
"Ford's continued weak sales should remain a source of concern for investors," auto analyst Brian Johnson of Lehman Brothers said in a recent research note.
Ford's shares rose 34 cents, or 4.1 per cent, to $8.57 Tuesday as investors anticipated a new contract that could help Ford. GM shares rose $1, or 2.8 per cent, to $37.05.
Ford's drop in September was largely due to a 62 per cent reduction in sales to rental car companies. Ford sold 22,811 of its old Taurus sedans in September 2006, mostly to rental car agencies, but sold none of the old Tauruses last month.
Ford has a new Taurus, but the company has sold only 17,912 since the sedan went on sale this year. Erich Merkle, vice president of auto industry forecasting for consulting company IRN Inc in Grand Rapids, said the numbers for the new Taurus are disappointing. Honda Motor Co sold 35,031 Accord sedans in September alone.
Ford's losses are part of its long-term restructuring plan. George Pipas, Ford's top sales analyst, said the company is on track to cut sales to daily rental fleets by more than its original goal of 30 per cent this year, or 135,000 vehicles. Ford, GM and Chrysler have been trying to cut back on rental sales, which can hurt brand image and profits.