Ford Motor Co. may lose $500 million to $600 million this year in Europe as the financial crisis in the region has worsened the industry’s problem of overcapacity, according to CFO Lewis Booth, who will retire on April 1. During an exit interview at Ford's Dearborn, Mich., headquarters, Booth told reporters that the company won’t give up and will continue with its strategies to boost profitability in Europe.
He explained that Ford will cut the rate of European losses by offering better products and by "continuing to work on our cost base.” Booth said that in the upcoming years, the good profit in North America should offset the European losses to have "decent" results.
Booth said that Ford may be able to return to an investment-grade credit rating due to Ford's "fundamentals." But then, he doesn’t think that this threshold will be reached this year. Booth, who is 63 years old, had been named Ford CFO in November 2008. Ford had been completing a year during which it recorded losses amounting to a record $14.8 billion and its share price dropped to as low as $1.26.
Booth said that the declining European market will prompt automakers to reduce factory capacity. Booth said that the circumstances surrounding the European overcapacity are “well understood."
He thinks that to cut capacity, there would have to be “some actions in Europe.” It was in 2009 that Booth engineered Ford's biggest debt restructuring. He is credited for having overseen the sale of Volvo to China's Zhejiang Geely Holding Group Co. in 2010 and the restoration of Ford's dividend after a suspension of 5 years. [source: Autonews]