Ford Motor Co may lose up to $600 million this year in Europe as the ongoing debt crisis hurts overall auto sales in the region, Chief Financial Officer Lewis Booth said on Wednesday.
Sales in the 19 markets Ford counts as part of Europe have been running at or below an annual rate of 14 million vehicles.
The company had projected industry-wide sales in a range of 14 million to 15 million.
The alliance between General Motors Co. and PSA Peugeot announced Wednesday is “an indication that people are looking for different solutions,” he said. But “putting two companies together doesn’t solve the capacity issue.”
The main problem is that the industry in Europe has plants that are able to produce about 20% more vehicles than consumers on the continent are likely to buy.
Good profit in North America should offset the European losses and provide “decent” results for years to come, Booth said. While noting that Ford’s “fundamentals” may warrant a return to an investment-grade credit rating, Booth said the automaker may not reach that threshold this year.
The company, which already has an alliance with Peugeot for the development and manufacture of diesel engines, has said it isn’t interested in forging new alliances in Europe in the near term.