Ford posts $8.67 billion loss, looks to small cars

Whether Ford succeeds depends not only on building cars people want to buy, but also figuring out how to increase profit margins on them to replace the lost truck revenue, said Efraim Levy, a senior industry analyst with Standard & Poor’s.

That’s likely to mean more job cuts. The company has already announced plans to cut its salaried work force expenses by 15 percent, with 200 workers leaving the company as of June 30. Earlier this week it announced another round of buyout and early retirement offers at selected factories.

But cuts alone won’t be enough. That’s why Ford is banking on selling a lot of the European vehicles in addition to domestic models, including a new Taurus due out next year and hybrid versions of the Fusion and Milan this fall.

“Fundamentally, Ford’s offerings in Europe are pretty credible,” said Jeremy Anwyl, president of the Edmunds.com automotive Web site. He said some of them should sell well in the U.S.

Car buyers and automakers are in crisis mode because of high gas prices, but that could change — and work in Ford’s favor — if prices even out or come down, Anwyl said.

“Crises by definition don’t last,” he said.

And Levy said truck sales should recover some as people who need them for work replace what they have.

But Ford, General Motors Corp. and Chrysler LLC still have to make up ground on Asian competitors who have won a lot of the U.S. car market in recent years, analysts say.

The Detroit Three have faced the brink before but have managed comebacks, led by superior products such as Ford’s Taurus in the 1980s and the Chrysler 300 in the 1990s, Schrager said.

“We have a very strong headwind against American carmakers today,” he said. “You’ve got to get your hand on the tiller and just drive this boat in a different direction. I think Mulally has figured this thing out all the way along.”

“A huge part of the country really does want to buy American and support American workers,” he added. “We have been here before, and the American manufacturers have roared back.”

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