GERMANY: Ford hoping European losses will soon end
Ford is hopeful that losses at its European operations will soon come to an end, David Thursfield, executive vice president for Ford's international operations, said on Wednesday, according to Dow Jones Newswires.
"I would be disappointed with a loss in the fourth quarter," he reportedly said during a conference call with journalists.
According to Dow Jones, he said he expected improved earnings in the third quarter as well but noted, however, that the period is traditionally weak because of holidays in the region, suggesting that losses will continue in the period.
Ford's European arm reported a $US525 million pre-tax loss in the second quarter, following a $249 million loss in the first, Dow Jones noted.
Thursfield, the architect of the region's turnaround programme, said that the second quarter loss was "an aberration" in part because of the launch of new products and losses to that extent won't continue, the news agency said.
According to Dow Jones, Thursfield and the region's newly appointed president and chief operating officer Lewis Booth remain committed to the ongoing turnaround programme despite the recent heavy losses in Europe.
"This is not the time to tear up plans, but implement plans that are in place, " Booth reportedly said, adding that he has some learning to do to become familiar with the problems faced in Europe.
Dow Jones noted that Booth was appointed on Wednesday as successor to Martin Leach, who stepped down earlier this month and, according to the Wall Street Journal, is now negotiating with Fiat to head up its troubled car unit.
Booth was previously president and chief executive of Ford's Japanese partner Mazda, the news agency added.
Thursfield reportedly said the company can still reduce product costs in Europe, saying it has implemented 30%-40% of its turnaround programme, and also reportedly said that with Ford's new C-Max minivan, the first products stemming from the programme are beginning to hit the showrooms.
Dow Jones said the restructuring programme, which was launched three years ago, aims to cut costs by lowering the numbers of parts used and increasing the amount of parts shared between models and brands and the European programme is used as the model for Ford's effort to revive its overall operations.
According to Dow Jones, Thursfield, however, said competition is getting tougher in Europe and indicated that further cost-cutting measures could be taken.
"We respond to the environment that we have and the environment is getting tougher," he reportedly said.
Dow Jones said that, despite packing on extra options to its cars in celebration of its 100-year anniversary, Ford has watched its market share slide in Western Europe to 11.3% in the first half of 2003 from 11.6% a year earlier.