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Ford CEO says on plan for profit in 2009

Ford Motor Co. Chief Executive Alan Mulally said on Wednesday the No. 2 U.S. automaker was on track to return to profitability in 2009 despite a forecast for weaker industrywide U.S. sales this year.
/ Source: Reuters

Ford Motor Co. Chief Executive Alan Mulally said on Wednesday the No. 2 U.S. automaker was on track to return to profitability in 2009 despite a forecast for weaker industrywide U.S. sales this year.

Mulally, speaking to reporters on the sidelines of an industry conference, also said he was "cautiously optimistic" about reaching a deal on wages and benefits with the United Auto Workers union.

"The plan is that we will return to profitability in 2009. And with everything that we see today and our projections — even with the lower overall market — we absolutely believe we can achieve that 2009 (target)," he said.

Asked about the UAW talks and whether Ford would reach a deal before the current contract expires on September 14, Mulally said, "I'm cautiously optimistic that we'll reach agreement."

A day earlier, Ford cut its forecast for 2007 industrywide U.S. auto sales, citing weakness in the housing market. General Motors Corp. and Toyota followed on Wednesday with their own forecasts for lower sales this year.

Mulally said he could not say if overall vehicle demand would recover in 2008, but added that Ford was watching a number of factors, including housing, economic growth and credit availability.

"If you look at the housing data, it takes a long time to get through that, sometimes two or three years, but we're going to continue to watch the data and we're going to continue to make production consistent with what that real demand is," he said.

Mulally said he was unsure if Ford's lower forecast for 2007 sales would prompt the company to reduce production over the remainder of the year. He said that decision would come in the next month.

"Around the first week in September is when we will make our decision for the fourth-quarter production," he said. "That's when we'll fine-tune the production decision."

Mulally also said Ford, which is in the middle of a restructuring that includes closing 16 plants and cutting up to 45,000 jobs, was on track to cut $5 billion in operating costs by next year under its turnaround plan, known as the "Way Forward."