Ford warns of deep Europe cuts

[jpd80]

Ford warns of deep Europe cuts

NEWS.COM.AU

FORD Motor Company has warned of major cuts to its European operations
as heavy losses there cut into the second largest US carmaker's profits.

Chief executive Alan Mulally said Europe's troubles run deeper than the current
economic crisis and cautioned that all carmakers must address the region's
serious problems with overcapacity.

"This is a structural issue, not a cyclical issue. It's not going to come back fast
and we're not going to be saved by volume," Mulally said in a conference call
discussing Ford's second quarter results on Wednesday.
"I think you're seeing the same viewpoint from most of the automotive companies."
Ford's second quarter profit fell by more than half to $US1.0 billion ($A980 million)
following a $US404 million loss in Europe.

It forecast that the troubled European unit will post a loss of $US1 billion this year,
dragging total profits significantly below the $US20.2 billion Ford posted in 2011.

Mulally declined to provide any details or hints as to where the European cuts will
strike or how many plants and jobs could be affected.
However, he cautioned that Ford will "continue to match our production to the real
demand, which means we're bringing the production down".

By referring repeatedly to the restructuring in North America - where Ford's workforce
was slashed in half from 2005 to 2009 - Mulally and chief financial officer Bob Shanks
implied the European cuts will be significant.

"We're clearly looking at the situation in Europe with a great sense of urgency,"
Shanks said."When you look at any significant restructuring that you have to do in
the automotive business ... you're going to have to hit all the parts of the business to
get it right and get a firmer foundation for profitable growth in the years ahead.
And that's what we're going to have to do in Europe."

Mulally said Ford will work closely with unions and other stakeholders on the
restructuring plan to ensure a smooth and effective transition.

Woah, anyone who thought Ford was going to sit back and let FoE turn into an endless money pit think again.