Ford and GM Plan to Scale Back Production

Both General Motors and Ford said yesterday they would scale back production in the second quarter, due to falling sales and dwindling market share in the face of competition from Japan. While Honda and Toyota posted sales gains (8.7% and 2.4%, respectively) last month, GM and Ford posted losses (2.6% and 4.1%, respectively). In response, the automakers will cut production by 3.7% at GM and 1.8% at Ford. Overall U.S. auto sales for February rose only 0.6% to a seasonally adjusted annual rate of 16.6 million, according to industry sources.

In other news, GM also announced yesterday it would cut its European workforce by around a fifth to address GM Europe's 2005 losses of $1.216 billion. According to a Reuters report, GM CEO Rick Wagoner said he hoped the move would help the automaker "break even or do better" in Europe this year.