Ford Motor plans to close at least one European plant as the losses here affect profit of the US car maker.
GM and PSA/Peugeot-Citroen already announced their plans to close plants in Europe, and so did Ford with its facilities in Southampton, England, and Genk, Belgium. Last month Ford announced it will report significantly lower second-quarter earnings due to losses in Europe, South America and Asia which tripled from the first quarter to $570 million. Ford is currently using its European Factory capacity at juts 60%, and the pretax losses this year may exceed $1.1 billion, double than what the company expected.
“By our calculations, Ford’s capacity utilization in Europe is even lower than GM’s, making it lower than any automaker besides Fiat,” Adam Jonas, an analyst at Morgan Stanley said Thursday in an e-mail. “Ford must address its excess-capacity situation with decisiveness to stay ahead of the wave.”
Since 1999 GM lost $16.4 billion in Europe, but Ford managed to earn $1.73 billion since 2007, even if it lost money in two of the last three years. While Ford of Europe had a stable leadership since 2010 under CEO Stephen Odell, GM recently named a new deputy CEO of its Opel operations, after Karl-Friedrich Stracke suddenly quit the company last week.