Ford getting killed in Europe

Should the company exit the continent altogether? That's increasingly looking like a smart move.

By Kim Peterson Jun 29, 2012 5:46PM
Ford (F) disappointed investors Friday and saw its stock drop to its lowest point in nine months after warning of steep international losses.

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.

Post continues below.
"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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121Comments
Jun 29, 2012 6:25PM
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Ship some of those small Fords with diesel engines over to the US.  They will be snapped up instantly.
Jun 29, 2012 6:26PM
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Too bad for Ford. They have been in Europe since at least the 1920s. Europeans do purchase their cars there and they are an established brand all over the continent. Hey! Maybe we could build them here and export them there? Just a thought!
Jun 29, 2012 6:50PM
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Ford makes " junk " ? ? ?

I guess that is why GM needed a bailout and Ford did not.

Jun 29, 2012 7:36PM
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Let the enslaved europeans take the train or walk!

FORD the only real free american owned and operate car company left!

Jun 30, 2012 2:00AM
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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.

Jun 30, 2012 10:14AM
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YES, BRING BACK PRODUCTION TO AMERICA!!!
Jun 29, 2012 10:15PM
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Ford builds junk???? What is important to our family is all around competitive prices, decent fuel mileage, styling, quality and lasting power of the vehicle based on price. Our 150 and 250's are 10-12 years old when we privately sell them for more than KBB prices with usually over 125,000 miles. We own an Edge limited, Taurus limited, Lincoln MKZ (J D Power best in class three years in a row) and the newest in the stable for running around on short trips a 37 MPG (actual) on our Fiesta. Have a friend who owns a large cab company and ONLY buys Escape hybrids. For all of you who spout with nothing but hyperbole and no facts to back up what you spout, please vote Romney and what little we have left in this country will go to the lowest bidder overseas. Europe is a failure because after world war two, we told them not to worry!!! The USA will take care of you.  Guess what, after almost seventy years of us throwing jobs, money and military protection they are lazy and broke. Have a nice day and keep buying Japanese, Korean and German, because they have no fear Uncle Sam is here (there).   
Jun 30, 2012 11:17AM
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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.

Jun 30, 2012 9:53AM
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My 2 cents worth from Australia.
It appears the US and the rest of the world have a huge stockpile of "new" cars. If the local governments gave Large subsidies to potential new car buyers (instead of handouts/bailouts to auto manufacturers) you could achieve a few things.
* reduce current stockpiles fast
* this would decrease the current average age of cars on the roads.retire many unroadworthy rust      buckets   Updates to safety, efficiency etc. 
* Maybe, just maybe give the companies an incentive to develop newer and better models of the    most popular cars leaving the dealership doors.
* create room for manufacturing (jobs) of new cars again.
* But most important, the public would actually receive a direct benefit from the government, not the  auto company board,executive & CEO. Their benefit would only be as a result of sales

Jun 29, 2012 9:30PM
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Ford did not receive any bail out money - maybe they would have need a temporary bailout.
I like Ford.

Jun 29, 2012 8:32PM
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Ford is getting killed in Europe and journalism is getting killed in the USA.  Those of us who are real professional women are appalled at the message to our daughters that they should not be intelligent, talented, courageous and strong women like Ann Curry, but rather giggly fools displaying their wares and fawning over butt-ugly men like the balding old coot Matty Lauer a la lightweight Savannah Guthrie.  It is comical that the announcement story of the latter had to be shorn of its comments because the comments were running 12 to1 against Guthrie.  Seems that *** kissing your way to the top is not consistent with the public mood right now even though out of touch NBC is clueless to that fact.  You'd almost think the fools who run JC Penney into the ground are moonlighting at NBC.
Jun 29, 2012 11:20PM
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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.  

Jun 30, 2012 1:08AM
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People there is a financial crisis around the world. Europeans are on edge, unemployment is rising. The average Joe there stopped buying and trying to pay their mortgage. That is where your Ford consumers are. Yes BMW, MB are still they preferred names plates for the rich but hey the name says it all. Ford has very good vehicle line up in Europe but those German brand names are iconic regardless if some of their models are dogs. People will still buy them. That is reality over there, in Europe the German and French brands that you don't see or read about are king. Just like our domestics here in the states. In China Buick is very prestigious but in the US its just the average people's car.
Jun 29, 2012 11:51PM
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@jrlphx....100% TRUE.....Back in the day (20-30yrs. ago) Nobody bought foreign autos, just about everyone bought "AMERICAN MADE" autos. There used to be PRIDE and PATRIOTISM in supporting our FAMILIESn in this COUNTRY. I live in NYC, and hardly ever see DOMESTIC cars anymore!! Every time someone HERE buys FOREIGN, they're basically supporting EMPLOYMENT OVER-SEAS and a foreign family with every car they buy! Whatever happen to "MADE IN THE U.S.A." label ?!?!?............... it seems to be EXTINCT!
Jun 30, 2012 6:29AM
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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.

Jun 30, 2012 8:17AM
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What an slanted article.  This writer must drive a Prius.  The article showes ALL manufacturers struggling with overstocked inventories.  The title of the article is SO slanted and misleading, but that is the problem with so called journalists.
Jul 1, 2012 4:50PM
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Just because Ford was the first to announce that sales are sliding in EU don't assume the other brands will not announce the same shortly. Look for Fiat-Chrysler, VW Group, GM, MB and BMW to have big issues in Europe.
Jun 29, 2012 9:43PM
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An article written from simple minded and short sighted perspective fortunately for share holders not held by F.

 

p-q4

 

 

Jun 30, 2012 9:53AM
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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.

Jun 30, 2012 1:01AM
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Dunno if leaving is the right idea. At some point the economy in Europe will again return to form...and would be good to be there when that occurs!
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