According to Alan Mulally, which is almost ready to retire as Ford’s CEO, the company is advancing as planned with its European unit, which should come out clean next year after extensive restructuring and cost cutting.
Muallally is optimistic, but the recent performances of the US automaker’s European division is still giving many a cautious view – in 2012 Ford of Europe lost $1.8 billion, with the 2013 result cutting it to $1.6 billion, which – if we don’t take into account $400 million in restructuring costs – would mean that in 2014 and 2015 the business needs to shed a further loss of $1.2 billion.
“We are very confident that with the European economy slowly recovering that we’re going to be profitable next year,” said Mulally. “When the economy slowed down, we took action,” he added. “We chose to introduce more vehicles instead of backing up and we also reduced capacity to meet real demand.”
Just like it did in North America in the wake of the latest financial crisis, Ford moved to cut down production overcapacity in Europe, with the automaker now shedding around 27% of its installed capacity in the course of the last three years – according to data from the International Strategy & Investment automotive research group.
The automaker is also basing its strategy on new model additions, like the EcoSport sport-utility vehicle, while moving to add to its European line-up for the first time – officially – the iconic Mustang sports car.
Via Wall Street Journal