Ford getting killed in Europe
Should the company exit the continent altogether? That's increasingly looking like a smart move.
The company is hurting badly outside of North America, to the point where its pretax operating profit in the second quarter will be substantially lower. Its pretax losses in Asia, South America and Europe may hit $570 million. To give you an idea of how quickly things are deteriorating, consider that pretax losses in those regions in the first quarter were only $190 million.
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"Our operations outside of North America are under increasing pressure," the company said in a filing late Thursday. The stock fell nearly 5% Friday to close at $9.59. Shares are down 11% this year.
Europe is the big drain here, as worries about the economy have taken a huge toll on new-car purchases. Ford was probably too optimistic in its earlier forecast of losing between $500 million and $600 million in Europe this year. Now, one analyst told Bloomberg he thinks the losses could exceed $1.1 billion.
Now, Ford and other automakers are facing the problem of having too many excess cars building up. Inventory levels could get too high, and automakers are mulling the idea of closing factories. There are rumors that Ford may have to close at least one plant in Europe.
The situation is so bad that the International Business Times wonders if it's time for Ford to exit Europe altogether. Things aren't nearly as horrible in Asia, Africa and South America. Maybe Ford should just drop out of the continent and focus on the rest of the world.
"Why continue losing money in Europe when China is forecast to become a 30 million unit-a-year market by 2020 and U.S. new car sales are poised to return to 16 million," asked Auto News Europe editor Luca Ciferri, according to IBT.
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Okay, time to disabuse people of their misconceptions. There really is no such thing as 'foreign' or 'domestic' car companies any more. They're all multinational companies now, with the only thing 'foreign' or 'domestic' about them being where the CEO's office is loacted. And considering that in addition to 'domestic' manufacturers, seven, maybe eight different 'foreign' manufacturers build cars here (Toyota, Nissan, Mitsubishi, Hyundai, Kia, Mercedes-Benz, BMW, and Volkswagen, last I checked), and that all three 'domestic' manufacturers build cars for the North American market outside the US - like in Mexico and Canada, what's 'foreign' and 'domestic' any more?
As for Ford abandoning European markets - what is the author smoking? Hell, most of what Ford's been rolling out in the US over the last few years - and will be for the next several years - has been developed, built and sold in Europe for years, such as the Fiesta and the upcoming C-MAX. Chrysler is following that trend (thanks to FIAT) with the new Dart, based on Alfa Romeo's Giulietta. GM has been getting most of their best ideas from Australia, via their subsidiary Holden - like the recent GTO reboot and the upcoming Impala SS reboot, since Aussies have very similar tastes to Americans when it comes to cars. And all three domestic manufacturers have rebadged Japanese imports at one time or another. And my old Ford Ranger is actually a Mazda - or is it the other way around? Dizzy yet - I sure am.
Welcome to the global economy, kids. Get used to it.
Of course we should bring all those Factories back to America, and get a lot of our unemployed back to work..
This also applies to other businesses abroad, who thought they could make a quick Buck, now be-moaning their losses of millions of $$$$$.
It's about time we stopped being a prop to other Countries, and take care of Our America First.
This article is based on senseless speculation. Ford has a major presense in Europe, and one of the largest market shares of any manufacturer. I highly doubt that Ford will be leaving Europe anytime soon. Europe has more auto brand choices than the USA, therefore all manufacturers have a smaller piece of the pie, but Ford is one of the largest. Another difference is that Japanese brands are less popular in Europe, and of course European cars are more common.
I'm not to sure if it still like this but the first number of the VIN would tell you where the car was Maufactured, 1 the US, 2 Canada, etc. As a trk driver I would go to Laredo,Tx. on the Border. I've seen many long trains bringing in Fords from Mexico.
A friend sent me a connction to an internet movie where the CEO of Chevy wa kissing the Chinese butts so badly, it really felt like a slap in the face of every American to me. I GUARENTEE thie whole country you will never see a Chevy parked in MY DRIVE belonging to me.
It all comes down to building what the consumer wants. No Mustangs in Europe unless they are bought here and then sent there, No F350's or 450's, They have a great Van.. and a few nice small Cars. It's hard to compete with VW, Mercerdes, and BMW in their home court. All those cars VW, MC, & BMW are used for Taxis,Cop Cars, and other things that only Chevies, Fords, and Dodges are in the US. Focus was at one time the best selling car in europe, but now there are so many copycats that are in manyways better. Alot of Diesels too.
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