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High Gas Prices Hit Automakers

We guess Ford Motor Co. learned its lesson. It dropped its goal of becoming profitable by 2009, and will cut production of trucks and SUVs for the rest of the year due to fast-rising gas prices.

Production cuts hurt automakers because the companies book the vehicles as ‘sold’ once they leave the factory.

“We all would like the basic business environment to not have deteriorated, but clearly the most important thing we can do for the long-term success of the Ford Motor Company is deal with this reality,” Ford President and Chief Executive Alan Mulally said in a conference call Thursday

Some analysts say the company is adequately responding to the challenging market.

GM said it would cut 2Q North American production by 5%. Chrysler has already cut North American production by 16% for the first 4 months of this year.

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