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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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.
An article written from simple minded and short sighted perspective fortunately for share holders not held by F.
I like Ford.
A Ford? Are you serious? I drive Mercedes Benz period. Anything else doesn't qualify to be called a car.
Go Mitt go. You be the man!
Santorum believes that Romney is a lying rat. A rat that will say anything, do anything just to get into the White House. Santorum has an inside track on Romney that he is unable to divulge because of his position as a loyal Republican.
The word is, Romney has been in the pocket of large corporations and he has make a deal with them to drop the corporate tax rate to 16%. This would allow those corporations to bring their money back into the US, and get out of the unstable banks and markets of Europe and the Far East. Santorum would not play ball with Romney because he knows that as President he cannot lead this country with a tax rate of 16%. You can’t support are arm forces and maintain are highways system with a tax rate of 16%. It just can’t be done, unless America cuts the fat very, very deep. The first time I ever saw Santorum get angry was when he was lied to by his adviser. It is the same with him and Romney. Romney lied to Santorum and then asked him to stand shoulder to shoulder with him as possible VP. That is as if Santorum would ever be Romney’s VP. Santorum has no respect for Romney.
I have never seen Santorum hate someone as much as he hates Romney.
What this article fails to mention is that GM and Fiat, are posting record losses too. When articles like this fail to mention these facts it just becomes propaganda against the only USA owned auto manufacturer.
To coin a phrase from slick willie, IT'S THE ECONOMY STUPID!
Let the enslaved europeans take the train or walk!
FORD the only real free american owned and operate car company left!
I guess that is why GM needed a bailout and Ford did not.
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