Ford Motor Co. (F), the second-largest U.S. automaker, reported a 57 percent drop in second-quarter earnings to $1.04 billion, as growing losses from its European operations sapped a stronger performance in North America.

The company expects to lose more than $1 billion in Europe in 2012, double its estimate from the beginning of the year.

In Europe, Ford is “facing in the situation with urgency,” Chief Financial Officer Bob Shanks told reporters at Ford’s headquarters in Dearborn, Michigan.

“We’re all over it.”

“This is a very serious situation,” said Ford Chief Financial Officer Bob Shanks. “It’s going to take quite a long time for Europe to work through these issues.”

The company said its South American posted a $5 million pre-tax profit— positive, but a plunge from the $267 million year-ago result as competition forced it to lower prices or use incentives to sell cars.

Ford also lost $66 million in Asia, where it is in the midst of a multiyear plan to increase production and vehicle offerings. That was down from a $1 million profit in the same quarter a year earlier.

Ford shares rose 1% in premarket trading.


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