Ford readies turnaround plan as it expects over $1 billion loss in Europe

Article by Anita Panait, on August 16, 2012

Ford Motor Co. is conducting a review of all aspects of its business in Europe as the company labels its performance in the region as not acceptable. According to Stuart Rowley, Ford’s controller, the results of the carmaker’s European business for the last 12 months are not acceptable, and the company needs to address that situation.

Rowley said that during the review, the carmaker will address all aspects of its business, including its structural costs, product portfolio and brand. Analysts like Adam Jonas of Morgan Stanley have been suggesting that Ford should shut down at least one factory in Europe in order to cut its excess production capacity in the region. According to Morgan Stanley, Ford is only using 63 percent of its production capacity in Europe.

Ford posted a 57-percent drop in its net income for the second quarter of 2012 to $1.04 billion, no thanks to $404 million in operating losses in the same period in Europe. Rowley, for his part, said that the Ford’s cost in Europe has meant that the company is stuck. He then pointed to Ford’s North American business as a good guide.

The current economic crisis in Europe is foiling the company’s revival plans masterminded by its chief executive, Alan Mulally. The dire situation at the continent has forced Ford to cut its profit forecast for the full year, saying that it could no longer match the $8.8 billion pretax operating profit posted in 2011.

The company is expecting is European operations to post more than $1 billion in losses for 2012. Ford chief financial officer Bob Shanks has said that the European market, which accounts for around a quarter of the company’s total revenues, will remain difficult for at least five more years.

Topics: ford, loss, europe, plan

If you liked the article, share on:

Comments

Recommended

Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
It is not a big secret that premium customers in China have a strong penchant for luxury cars with a spacious interior. In particular, premium customers in China purchase luxury...
by - April 21, 2017
Chinese automaker Chery did not leave a good impression last time they were in Australia - due to its cheap design. But this year, Chery showcases its new Tiggo Sport...
by - April 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries