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post #1 of 2 (permalink) Old 08-28-03, 05:25 AM Thread Starter
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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.


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post #2 of 2 (permalink) Old 08-28-03, 06:10 AM
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Ford predicts return to profitability in Europe

By Mark Truby / The Detroit News

Ford Motor Co. said its faltering European operations should return to profit in the fourth quarter, but warned that further cost cutting may be necessary.

"I would be disappointed if we didn't return to profit in the fourth quarter," said David Thursfield, executive vice president and chairman of Ford of Europe. "I don't expect the losses to continue."

The profit forecast came as Ford announced that Lewis Booth, previously president of Mazda Motor Corp., is taking over as president and chief operating officer of Ford of Europe.

Booth, 54, replaces Martin Leach, who left Ford of Europe last month to pursue other opportunities and after the operating unit lost $774 million in the first half of 2003.

Ford is working to stanch losses in Europe as it strives to return to profitability after losing $6.4 billion in 2001 and 2002.

The pressure is squarely on Thursfield, who crafted Europe's turnaround strategy three years ago along with Ford President and Chief Operating Officer Nick Scheele.

"I am absolutely committed to ensuring Ford of Europe's survival and prosperity," Thursfield said in a conference call with reporters Wednesday.

Thursfield and Booth said Ford's European turnaround strategy is solid. Thursfield, though, acknowledged that further cost reductions are necessary and did not rule out the possibility of job cuts.

Ford wants to cut worldwide personnel costs by 10 percent by year-end.

Thursfield said Ford of Europe plans greater cooperation with the automaker's Premier Automotive Group, which is comprised of European luxury brands Jaguar, Volvo, Land Rover and Aston Martin.

Mazda has become an important proving ground for Ford executives in recent years.

Booth's predecessor at Mazda, Mark Fields, is now running the Premier Automotive Group. Phil Martens, who worked under Fields at Mazda, is head of product development at Ford's North American operations.

Mazda is replacing Booth, who became president of the Japanese automaker a year ago, with Hisakazu Imaki, 60. The 38-year Mazda veteran will be the first Japanese executive to run Mazda since 1996. Ford holds a controlling interest in automaker.

"We believe this personnel reshuffle could be very positive for morale at Mazda and we have considerable expectations for the Imaki team," UBS Warburg analyst Takaki Nakanishi said Wednesday.

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