Ford will not resume production of its Freestar minivan at its Oakville, Ont. plant despite earlier plans to do so, according to Automotive News, an industry publication.
The company closed its Freestar production line in Oakville in November in order to build more of the Edge and Lincoln MKX crossover utility vehicles -- scaled-down sport utilities built on a car chassis, rather than a truck chassis.
The closure prompted the layoff of 214 workers at the Oakville facility.
At the time, the Ford Motor Co. said it intended to resume production of the Freestar at some point before phasing it out for good in 2007.
At the end of last year, however, Ford decided not to resume production of the Freestar, spokeswoman Anne Marie Gattari told Automotive News on Tuesday.
CTV's Business Editor Linda Sims said Ford minivans have been dropping in popularity in recent years.
"Minivan sales for Ford have dropped by 30 per cent so far this year alone. People are not buying them the way they used to," Sims told Â鶹´«Ã½net.
"GM has announced that it is getting out of minivans entirely. So Ford, who had halted production of the minivans at its Oakville plant in November but planned to start up again in 2007, says no we are not going back there ever again."
She said the majority of the laid-off workers in Oakville have already been brought back to work on production of the crossover vehicles.
The news comes as analysts predict Ford will lose its No. 2 spot in the U.S. auto market this year to Toyota Motor Corp.
The automotive giant faces a number of challenges as its share of the market continues to shrink, mortgages mount and the company kicks-off its third turnaround plan in the last five years.
There is good news, however. Reuters news service reports the company has entered the new year with a highly regarded chief executive in Alan Mulally, the popular new Edge crossover is projected to be a hit, and the company has reached out to Toyota to look at possible partnerships.
"Ford is a deep turnaround situation," Morgan Stanley analyst Jonathan Steinmetz said in a recent note for clients, Reuters reports.
The building blocks are forming, Steinmetz said, but noted that sustainable positive income from Ford's auto operations is still four years away.
Analysts are united in predicting that Ford is still in a precarious position.
Ford stock fell 2.72 per cent in 2006 and is down 50 per cent since early 2005, when its most recent downturn began.
By Ford's own estimate, its North American unit will lose money until 2009 and run through $17 billion cash in the next three years.
With files from The Canadian Press
