AUSTRIA: Ford considers European operations 'czar' who would also run PAG
Ford is considering naming a European ‘czar’ to oversee both Ford of Europe and Premier Automotive Group, Automotive News Europe reported.
Stunned by mounting losses at Ford of Europe, top executives in Dearborn want closer cooperation between Ford of Europe and PAG, particularly in purchasing and parts sharing, Ford sources said last week in Graz, Austria.
Sources say Ford of Europe president Martin Leach and PAG chairman and CEO Mark Fields would be top candidates to run “Ford in Europe.” Such a reorganisation, if approved, could happen in September or October.
Meanwhile, Ford international operations president David Thursfield, who is still also Ford of Europe chairman, will now spend nearly all his time at Ford’s European headquarters in Cologne, Germany, trying to stem the losses.
“Nobody is panicking here,” said a Ford official in Cologne, who added Thursfield already spends much of his time in Germany. “We’re not taking any drastic action.”
Ford cost cutting, which includes boosting purchasing efficiencies by working closely with suppliers, is having the desired effect, and Ford is not discounting prices to preserve long-term brand value, the official said.
Ford of Europe lost $US525 million (€458 million) in the second quarter, compared with a loss of $18 million a year ago. PAG improved its performance with a profit of $166 million, up from a loss of $122 million a year ago.
Ford officials blamed the losses on lower net pricing, an unfavourable product mix, lower industry volume and dealer stock reductions. But they are puzzled why their European operations, once the model for corporate efficiency, are struggling.
Said one: “We’ve got the best products in a generation and we’ve still got problems. What in the world is going on? Are we organised right?”
Ford could face more problems before the situation improves.
“Historically the third quarter is weak for them even if they make a good product,” said John Lawson, analyst for SmithBarney in London. “It’s difficult to see how they can recover from a big loss in the second quarter in the third quarter.”
With the new Focus C-Max, Ford has been a late arrival in Europe’s key compact minivan segment, Automotive News Europe noted.