DETROIT—Ford Motor Co. said April 25 that it plans to stop selling all Ford brand sedans in North America and that it is nearly doubling its cost-cutting target by 2022 from the plan it laid out only six months ago. The auto maker said it will fix or eliminate unprofitable global operations.
Ford said the only cars it will keep in North America, beyond their current generations, are the Mustang and the Focus Active arriving in 2019.
The auto maker said it now expects to achieve an 8 percent global profit margin by 2020, two years sooner than planned. It upped its five-year cost-cutting goal to $25.5 billion, from the $14 billion projected by CEO Jim Hackett in October.
"We're going to feed the healthy parts of our business," Hackett told analysts on a conference call Wednesday, "and deal decisively with the parts that destroy value."
Ford announced the improved guidance as the company reported a 9 percent increase in first-quarter net income. Its global profit margin was 5.2 percent in the quarter, as higher commodity costs reduced earnings in North America. The company posted a 6.4 percent margin during the same quarter last year.
Ford shares rose 2.6 percent to $11.40 in after-hours trading on Wednesday.
Cars being cut in North America are the Fiesta, Fusion and Taurus. They will be discontinued over the next few years as their life cycles end. Joe Hinrichs, Ford's head of global operations, said other vehicles will replace the cars at factories in Mexico and Chicago where they are now built.
Ford's head of global markets, Jim Farley, said the company is exploring new vehicles that give people the space and versatility of a utility vehicle without a fuel economy "penalty."
"We will have a very diverse passenger car business," Farley said. "It just won't be traditional silhouetted sedans that tend to be commoditized."
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