E.U.:Ford's Scheele expects better sales in Europe
By Dan Stets / Bloomberg News
FRANKFURT -- Ford Motor Co. expects third-quarter sales to improve in Europe and the carmaker is sticking with a U.S. plan modeled on European plans to improve earnings, Ford Chief Operating Officer Nick Scheele said Tuesday.
Scheele, in a televised interview with Bloomberg News from the Frankfurt International Motor Show, also said that the euro provides "predictability" for automakers and other manufacturers and recommended that the common currency of 12 European nations also be adopted by the U.K. and Sweden.
Sales by Ford in Europe have slumped as the carmaker has lost market share to Toyota Motor Co.p. and PSA Peugeot Citroen. Ford has shut or sold five plants in Europe since 2000 to reduce manufacturing overcapacity. The company said it's now 40 percent through a cost-cutting program and that results, including productivity improvements from new technology, are beginning to show.
Chief Executive William Clay Ford Jr. announced a plan in 2002 to close plants and release new models in North America, which he said was modeled on the European plan. The strategy remains to cut costs, control capacity and introduce new models in both the U.S. and Europe following the original plan, Scheele said in a press conference.
"We're not going to change the strategy," he said.
Ford's European Loss
Ford of Europe's pretax loss widened to $525 million in the second quarter from a loss of $18 million a year earlier and a loss of $249 million in the first quarter. The automaker blames about half the loss on currency exchange issues along with incentives and the need to reduce inventories, Scheele said.
Ford, which has cut $1.3 billion since 2001 from European operations, expects "significant" improvements in the next 12 months in international operations as it adds new products and gets more benefit from costs cuts, said David Thursfield, head of Ford's international operations. Ford expects new models to help it return to profit in the fourth quarter, he said.
The carmaker's sales in Western Europe slipped 4.4 percent in the first half, more than the overall market's 2.6 percent decline. Ford-brand sales fell 3.7 percent, while Volvo sales declined 8 percent and Jaguar sales plunged 15 percent. The company's market share declined to 11.3 percent from 11.5 percent a year ago.
Scheele also said it's Ford's goal to make the Premier Auto Group, which includes the Volvo, Jaguar and Range Rover and Aston Martin brands, profitable this year. Ford is trying to improve the profitability of all of its units to meet a goal of $7 billion pretax annual profit.
Separately, Lewis Booth, on his second day at work as head of Ford's European operations, said he's glad to be back in Europe after 11 years away, while "it's too soon for him to comment" on his tenure. Booth is at the show to show a Ford prototype of a four- passenger coupe. He replaces Martin Leach, who left the division after two straight quarterly losses.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....