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THE SHIFT: Executives at Ford Motor Co. and General Motors Corp. say they knew gasoline prices would rise and the U.S. market would shift from trucks to cars. But they thought the change would be gradual. Instead, gas prices rose 74 cents per gallon from February to May, and pickups dropped from 13 percent of the U.S. market to 9 percent.
THE REACTION: Both Ford and GM see the change as permanent. Each has cut pickup truck and sport utility vehicle production and announced plans for new small cars for the U.S. within two years. They now are scrambling to boost car production.
THE RESULTS: Industry analysts say that because Ford, GM and Chrysler LLC relied so much on trucks and SUVs for profits, they may have to borrow more money to stay afloat until the U.S. market recovers or their small cars get to showrooms. Even then, the profit margin on small cars is much less than on trucks.
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