Ford Sees U.S. Auto Sales Falling Below 13 Million Forecast

U.S. auto sales this year may not reach 13 million that was the low end of Ford Motor Co. (F)’s range of estimates, Chief Financial Officer Lewis Booth said.

Ford had forecast industrywide 2011 sales of 13 million to 13.5 million vehicles, including medium- and heavy-duty trucks, in its home market. Deliveries may rise to 12.7 million cars and light trucks this year, the average estimate of 18 analysts surveyed last month by Bloomberg. The average estimate in April was for 2011 sales of 13 million light vehicles.

Concerns about the economy and financial markets are further delaying purchases put off during the recession and early recovery, Jeff Schuster, executive director of global forecasting at J.D. Power & Associates, said at the time. He is among the 12 analysts surveyed by Bloomberg who have cut their full-year auto-sales estimates since the first quarter.

“We see signs of pent-up demand,” Booth said today, speaking at a UBS conference in London. “What it’s going to take for that pent-up demand to emerge is some confidence in what the future will look like.” Dearborn, Michigan-based Ford anticipated a modest U.S. recovery, “but we didn’t expect it to be quite as slow as it’s been.”

U.S. light-vehicle sales rose 11 percent in 2010 to 11.6 million from the previous year’s 10.4 million, which was the lowest total since 1982, according to Autodata Corp., the industry researcher based in Woodcliff Lake, New Jersey. They averaged 16.8 million annually from 2000 to 2007.

Checking Costs

Ford slid 29 cents, or 2.8 percent, to $10.05 a share at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 40 percent this year.

Ford will return to an investment-grade credit rating “sooner rather than later,” and the automaker won’t resume paying a dividend until after that, Booth said. Standard and Poor’s rates Ford’s debt at BB-, three levels below investment grade, with a positive outlook.

Structural costs related to new-model introductions may rise less than the $2 billion originally forecast, he said.

“If the industry takes a turn down, we will react to it,” Booth said. “We no longer sit around and wait for the problem to go away. If we see a significant downturn, we’ll cut back on structural costs.”

Chief Executive Officer Alan Mulally raised prices this year to offset some of the higher costs the company expected, including manufacturing spending. The automaker is seeking to lower its labor costs in contract negotiations with the United Auto Workers. The current accord covering Ford’s 41,000 U.S. hourly workers expires Sept. 14.

Labor Talks

Booth said the UAW has not followed its tradition of selecting a lead company by Labor Day to set the pattern on wages and benefits for contracts for all three U.S. automakers. Talks may go past the deadline, if needed, Booth said today.

“It’s not clear how it’s going to work out,” Booth said. If no deal is reached by the deadline, “we expect to continue working and continue those discussions.”

Ford earned $9.28 billion in the past two years after $30.1 billion in losses from 2006 through 2008. The company borrowed $23.4 billion in late 2006, putting up all major assets including its blue oval logo as collateral. That helped Ford avoid the bankruptcies and bailouts that befell the predecessors of General Motors Co. (GM) and Chrysler Group LLC.

To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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