Abandon Car! Ford Dropping All Passenger-Car Models Except Mustang

Ford unveils $11.5bn extra cost-cuts in bid to kick-start turnaround

Ford said it now expects to hit a pretax profit margin of 8 per cent globally and 10 percent in North America by 2020, ahead of a previous target of 2022.

Amid declining consumer demand and product profitability, the company said it will not invest in next generations of traditional Ford sedans.

Ford stock rose almost 3 percent in after-hours trading Wednesday to $11.40.

Speaking to reporters on Wednesday as the company reported first-quarter results, Chief Financial Officer Bob Shanks said "we have looked at every single part of the business".

Ford has announced that, in the U.S., it plans to cull its existing base of passenger cars down to just two vehicles - the Mustang, and the Focus Active.

The company said its net income for the quarter rose 9 percent due largely to a lower income tax rate, as the automaker promised additional efficiencies in the coming years.

The lion's share of the automaker's quarterly profit was driven by high-margin pickup trucks and SUVs in North America.

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Ford is pretty serious about trimming its U.S. lineup in the coming years, and that's bad news for anything that isn't a truck or SUV.

During the company's first-quarter financials conference call on Wednesday, Ford presumably just said, ah, the hell with it, and more or less confirmed that it's dropping the axe on four of its cars.

Shanks suggested that Ford could reduce investment in certain geographic regions or exit them completely if it did not see adequate returns on the horizon. "We can make different investments; we can partner; we can exit products, markets".

Ford plans to cut $11 billion in operating costs and $5 billion in capital expenditures between 2019 and 2022.

Shanks said the Lincoln brand still is losing money in China, where it launched in 2015, but now plans to begin local production there in 2020.

The auto maker expects its annual capital expenditure to peak this year at $7.5bn, and then will be cutting costs across engineering, marketing, manufacturing and sales between 2019 and 2022, saving a total of $25.5bn.

Executives talked about the need to further improve operations in Europe and South America. Ford is choosing the "much higher-performing" [in terms of profitability] utilities and not "traditional-silhouette sedans that tend to be commoditized". Its Asia Pacific business swung to a $119 million loss, from a $148 million profit a year ago.

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