Ford Faces $600 Million Loss In Europe
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Analysts at Ford Motor Co believe that the company could lose between $500-$600 million in its European auto sales market this year, as the ongoing debt crisis in the region continues to depress consumer spending.
“We’ve seen Europe get off to a tough start this year,” said Ford’s Chief Financial Officer Booth at the company’s global headquarters in Dearborn, Michigan. “We think Europe is much more likely now to be at the bottom end of the scale.”
Analysts at Ford Motor Co believe that the company could lose between $500-$600 million in its European auto sales market this year, as the ongoing debt crisis in the region continues to depress consumer spending.
“We’ve seen Europe get off to a tough start this year,” said Ford’s Chief Financial Officer Booth at the company’s global headquarters in Dearborn, Michigan. “We think Europe is much more likely now to be at the bottom end of the scale.”
According to Booth, new vehicle sales in Europe could drop to around 14 million this year, compared to 15.3 million vehicles in 2011. The projected loss for 2012 would also easily eclipse the $27 million loss that Ford suffered in Europe last year.
Still, Booth remained confident that the overall financial outlook for the company would remain positive, due to expected strong results in North America.
[quote]”We feel OK about the guidance we’ve given for the total company,” said Booth, as cited by Reuters.[/quote]Ford is a major player in the European market, with 16 manufacturing plants in the company and over 19 key markets, which the company tracks in its forecast. Sales in the region also account for about 30 percent of Ford’s global total.
On Wednesday, the company’s CFO also suggested that he would look into ways to cutting purchasing and production-development costs in Europe, especially if sales figure continue to slip.
While the company lost $190 million in Europe for the fourth quarter of 2011 alone, it still managed to register an overall $7.8 billion in earnings for the year. Booth added that he expected the rate of losses for Europe to be similar or slightly worse in the first quarter of 2012, though the introduction of new vehicles later in the year could improve the rate.
On Wednesday, rival US automaker General Motors Co signed an agreement with PSA Peugeot Citroen to form a global alliance, which the two automakers claim to be able to cut at least $2 billion in its international costs.
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But Booth said that he would not be interested in forging any new alliances in Europe in the new term, particularly as the potential impact of any such deal remains unclear.
[quote]”Putting two car makers together are not going to solve a capacity problem,” said Booth to the Wall Street Journal.[/quote]“It’s unclear right now how they will realize the benefit,” he added.
