Ford to Surpass GM in Europe Turnaround

Tomorrow, January 29th, Ford is expected to report its fourth-quarter results and possibly the lowest operating profit for the entire 2012.

“We think we can be profitable, with the restructuring actions that we’ve taken and all the new products that we’re introducing, by mid-decade,” said CEO Alan Mulally.

Although the results don’t show even a slight revival, Ford said that its turnaround plan in the US will help the company recover faster in Europe than its competitors. Chief Financial Officer Bob Shanks said that even if Ford will report losses of more than $1.5 billion in Europe for last year and expects similar losses for 2013, the company will manage to make these losses disappear in about two years. Analyst Peter Nesvold said that when it comes to the automakers’ efforts to revamp operations in Europe, Ford will be one year ahead of GM.

“In the case of Ford, ultimately, this is the team that without external help was able to accomplish in North America what almost nobody thought was going to be possible,” Nesvold, who is based in New York, said in a telephone interview. “The problems aren’t identical in Europe, but they are similar.”

Analysts expect Ford’s fourth-quarter revenue to be down 4.4% to $33.1 billion from $34.6 billion in 2012. Ford plans to reach profit margins of 8% to 10% in North America and this will help the automaker make up for the loss in Europe.