The No.2 US automaker finally returned from losses in Europe, as the second-quarter brought the unit’s first profit in three years. And it was all due to workers in Germany, who conceded a $63 million bonus payout.
The German employees at the automaker’s car plant in Cologne waived off a 25-year anniversary bonus. That was part of their concessions mase to retain there the production of the Fiesta subcompact model. The $63 million gain was enough for the company to return to the black last quarter for the first time since 2011.
“It’s not easy to get into the black again in the European market,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “Ford was deeply unprofitable in a highly competitive market. The sustainability of this result remains to be seen.”
The company managed to work around the division’s economic crisis triggered losses, as the European region unit was down $1.6 billion in 2013 and was not scheduled to return to positive results until 2015. Ford, the second-biggest brand in Europe, started its cost cutting measures in October 2012, closing three plants, including an assembling facility in Genk, Belgium. It also countered the market’s dip with 15 new or refreshed models, which led to half-year sales gains of 6.6%.