In a statement, Ford CEO Jim Hackett explained the move away from sedans and hatchbacks.
This news comes as part of Ford's "fitness" plan, outlined by CEO Jim Hackett past year, in which he said the Blue Oval would cut its operating costs by $14 billion by 2022. If appropriate returns are not on the horizon, we will shift that capital to where we can play and win.
Ford Motor Co. on Wednesday said it plans to stop selling all Ford brand sedans in North America and that it is almost doubling its cost-cutting target by 2022 from the plan it laid out only six months ago. There's also the potential for new cars combining the "best attributes of cars and utilities, such as higher ride height, space and versatility". However, Ford will continue to produce the legendary Mustang.
Ford chief financial officer Bob Shanks weighs in on the company's earnings and how they plan to create more growth. "North American operations had been hurt by rising costs for key commodities such as steel and aluminum", he added.
The announcement came as Ford said it earned a first-quarter profit of $1.7 billion, a 9% increase compared to the same period a year ago. The company posted a 6.4 percent margin during the same quarter previous year.
Boeing said first-quarter profit rose 57 percent to $2.48 billion. And in every region of the world, Ford reported either a decline in profits or a loss. It is, by far, the company's most dramatic production change in its 115-year history since Henry Ford adopted the assembly line. This month it got a twin boost when American Airlines ordered 47 more of its 787 Dreamliner jets and Hawaiian Airlines signed its intent to buy 10 of the twin-aisle planes for worldwide routes.
Due to Ford's announcements, what was not explicitly stated but is likely that Lincoln's sedans will also disappear. As ride-hailing services like Uber or Ford's own Chariot continue to expand into more remote areas in the U.S. and the world, and companies advance their autonomous-vehicle technologies, it will become less likely that the average homeowner owns a vehicle, let alone multiple vehicles.
Since Ford recently refreshed its Fusion sedan for the second time, that auto will stick around the longest-at least for the next couple of years, according to company spokesman Said Deep.