Operations

Town Car Sales Dropped in St. Thomas Plant

Posted on June 18, 2008 by LCT Staff - Also by this author - About the author

By Nicolas Van Praet, Financial Post

ST. THOMAS, Ontario – The market for Ford Motor Co.'s Canadian-built Lincoln Town Car has collapsed during the past month, heightening concern about the future of the Ontario factory that makes the vehicle. Ford meets with U. S. union leaders and plant managers in Detroit today (June 13) to discuss the continent's rapidly changing sales environment.

Sales figures show Ford sold 764 Town Cars in the United States in May, a drastic decline from the 4,508 the automaker sold during the same month in 2007. The company sold 6,176 of them during the first five months of the year, less than one-third the number it sold during the same period last year.

Political leaders in such cities as New York are darkening the future of Ford's big cars. The municipality recently mandated new fuel-economy regulations of 25 miles per gallon for its taxi and black-car services that Ford's current Town Car and Crown Victoria models cannot meet.

Historically, the Town Car has been one of the top choices for chauffeur-driven cars while the Crown Victoria has been a mainstay of New York's yellow cab fleet. Now, operators are steering toward other models.

"We have already begun moving our cars from Lincoln Town Cars to hybrid vehicles," said John Acierno, whose family owns Brooklyn, N. Y.-based Executive Transportation Group, one of the largest ground transportation companies in North America with a fleet of 1,800 vehicles. In the two months since the regulations were passed, 90 Executive vehicles have converted, he said.

"We anticipate that change to accelerate," Mr. Acierno said. "[Our] drivers are both doing the right thing in terms of the environment and coping with gas prices."

Executive and investment banking firm Lehman Brothers has set up a lending company called Green Car Funding Corp. to provide drivers switching to hybrids with low-interest loans.

Ford builds the Town Car, the Crown Victoria as well as the Mercury Grand Marquis at its assembly plant in St. Thomas, Ont. Operating on one shift instead of the usual two or three, the factory is one of eight of Ford's factories in North America running below full capacity, according to estimates by Global Insight Inc., a research firm based in Lexington, Mass.

U.S. sales of the Grand Marquis dropped by half in May, to 3,087 from 6,371 in May, 2007. U. S. sales of the Crown Victoria, while down 23% this year over last year, have not fallen as quickly as those of the other two sedans. Police forces continue to buy the vehicles despite rising gas prices.

"I'm sure if fuel prices continue to rise, then that's something we're probably going to have to take a look at," said Sgt. Keith Wilson of the Michigan State Police, which runs about 550 Ford Interceptor Crown Victorias in its fleet of 600 vehicles. "But for now what dictates how we purchase vehicles is whatever vehicle is best suited for the job our troopers need to do." Sgt. Wilson said the Fords are lauded for their size and performance. Their maximum speed is about 210 km/h.

Ford executives said in December that sales of its largest sedans would slide this year as the cars become primarily fleet vehicles and not bought by retail sales customers. But they were side-swiped by a rise in gasoline prices above US$4 a gallon that threatens sales of their bread-and-butter F-Series pickup trucks and SUVs.

Source: Financial Post (Don Mills, Ontario)/Canwest News Service

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