Ford warns of deep Europe cuts

[jpd80]

Ford warns of deep Europe cuts

NEWS.COM.AU

FORD Motor Company has warned of major cuts to its European operations
as heavy losses there cut into the second largest US carmaker's profits.

Chief executive Alan Mulally said Europe's troubles run deeper than the current
economic crisis and cautioned that all carmakers must address the region's
serious problems with overcapacity.

"This is a structural issue, not a cyclical issue. It's not going to come back fast
and we're not going to be saved by volume," Mulally said in a conference call
discussing Ford's second quarter results on Wednesday.
"I think you're seeing the same viewpoint from most of the automotive companies."
Ford's second quarter profit fell by more than half to $US1.0 billion ($A980 million)
following a $US404 million loss in Europe.

It forecast that the troubled European unit will post a loss of $US1 billion this year,
dragging total profits significantly below the $US20.2 billion Ford posted in 2011.

Mulally declined to provide any details or hints as to where the European cuts will
strike or how many plants and jobs could be affected.
However, he cautioned that Ford will "continue to match our production to the real
demand, which means we're bringing the production down".

By referring repeatedly to the restructuring in North America - where Ford's workforce
was slashed in half from 2005 to 2009 - Mulally and chief financial officer Bob Shanks
implied the European cuts will be significant.

"We're clearly looking at the situation in Europe with a great sense of urgency,"
Shanks said."When you look at any significant restructuring that you have to do in
the automotive business ... you're going to have to hit all the parts of the business to
get it right and get a firmer foundation for profitable growth in the years ahead.
And that's what we're going to have to do in Europe."

Mulally said Ford will work closely with unions and other stakeholders on the
restructuring plan to ensure a smooth and effective transition.

Woah, anyone who thought Ford was going to sit back and let FoE turn into an endless money pit think again.

[burnz]

it's not just ford, i dont have a link.

"but" GM have said to vauxhall/opal sink or swim... their choice (holden in there too)

[jpd80]

Originally Posted by burnz

it's not just ford, i dont have a link.

"but" GM have said to vauxhall/opal sink or swim... their choice (holden in there too)

Yeah and that why Mulally referenced that all other manufacturers are in the same boat.
A while back Europe manufactured vehicles for itself and rest of the world but now Russia and Asia have plants
underscoring Europes excess production capacity, there's going to be some big haircuts coming.

My hope is that FoA catches a regional export contract and builds RHD Mondeo in Australia
FoE, make FoA wait at every turn for products, won't supply diesels yet have so much capacity,
I hope they get a giant enema..

[burnz]

Originally Posted by jpd80

Yeah and that why Mulally referenced that all other manufacturers are in the same boat.
A while back Europe manufactured vehicles for itself and rest of the world but now Russia and Asia have plants
underscoring Europes excess production capacity, there's going to be some big haircuts coming.

My hope is that FoA catches a regional export contract and builds RHD Mondeo in Australia
FoE, make FoA wait at every turn for products, won't supply diesels yet have so much capacity,
I hope they get a giant enema..

quote (mark ruess) "any part of GM global not performing WILL be wound up".

[jpd80]

Originally Posted by burnz

quote (mark ruess) "any part of GM global not performing WILL be wound up".

Wow, sounds like GM is through pussy footing around with Opel...

[ivorya]

Originally Posted by jpd80

My hope is that FoA catches a regional export contract and builds RHD Mondeo in Australia

I can only see Ford building these cars (All Focus/Mondeo etc, Left/Right hand drive) in Asia, which will export to the world.

They'll invest in bigger, more streamlined plants, and will earn squillions doing so.

[jpd80]

Originally Posted by ivorya

I can only see Ford building these cars (All Focus/Mondeo etc, Left/Right hand drive) in Asia, which will export to the world.

They'll invest in bigger, more streamlined plants, and will earn squillions doing so.

Could be right, the EU is entertaining dropping import restrictions and tariffs on vehicles to increase competition and lower prices there.
If they follow through with that, there will be a lot of blood on the floor Korea and Thailand will scoop the prize...


On another note..
FoA is in hunker down mode, like it or not that's what they have to do to survive

[Resurrection]

Europe is a basket case and the seeds of the next war on the continent are being sown.

[Road_Warrior]

Originally Posted by ivorya

I can only see Ford building these cars (All Focus/Mondeo etc, Left/Right hand drive) in Asia, which will export to the world.

They'll invest in bigger, more streamlined plants, and will earn squillions doing so.

Perhaps, perhaps not. That will only work with mass market, volume selling vehicles like the Focus and Festiva. The capital outlay to build new facilities in a current global economic situation is an unpalatable decision to make. All of the investment recently announced for facilities that have just been completed or will be completed soon were programmed a number of years in advance.

Dearborn is on record previously as recognising the advantage they have in Australia whereby they already own all the facilities...

[jpd80]

Originally Posted by Road_Warrior

Perhaps, perhaps not. That will only work with mass market, volume selling vehicles like the Focus and Festiva. The capital outlay to build new facilities in a current global economic situation is an unpalatable decision to make. All of the investment recently announced for facilities that have just been completed or will be completed soon were programmed a number of years in advance.

Dearborn is on record previously as recognising the advantage they have in Australia whereby they already own all the facilities...

True and the biggest leg up they can give local manufacturing is to stop that $700 million development cost,
cars must be global to be profitable and to stay at the quality and equipment levels demanded by buyers..

[Road_Warrior]

Originally Posted by burnz

it's not just ford, i dont have a link.

"but" GM have said to vauxhall/opal sink or swim... their choice (holden in there too)

Peugeot Citroen have just announced 8000 jobs will be cut across its vehicle manufacturing operations in France. 8000!!! And that's from one car maker.

[Bossxr8]

Originally Posted by Road_Warrior

Peugeot Citroen have just announced 8000 jobs will be cut across its vehicle manufacturing operations in France. 8000!!! And that's from one car maker.

I had been thinking for some time that European manufacturing operations had to seriously cut back on their overcapacity, but no one was willing to go first.

As soon as Puegeot announced their massive job cuts I knew it was just a matter of time before all the others followed suit now that the precedent was set.

Expect alot more cuts over the next few months. They have all held out to long but they can't sustain it forever.

[Yellow_Festiva]

I really dont get it. I can understand if Australian Ford manufacturing is strugling as it is such a small market with not many ways to cheapen production...

As for Europe... How many 'cheap labour' countries are available to Ford? Transportation is cheap as it's done overland (I assume).

Bloody hell... It puts the Korean achievements into context doesn't it. They don't have a cheap labour force compared to Europe and most other Asian countries and every car they export must be on a ship....

Most of my extended family is in Europe... wages have dropped (Italy big time), real estate has dropped (Malta) and things are still going south.

Wonder how much the Euro has influenced this?? Is there 1 country that has been happy since the Euro has been introduced???

[jpd80]

Story goes that VW Group of companies has been using huge sales in China to bankroll big price cuts in Europe.

But really the whole of Europe's car makers have huge production over capacity, just like North America had.

[Bundy]

Yup the best thing EU can do is wind up the Euro and cut loose countries like Italy, Greece etc that are dragging it down. The One Currency dream is over, its just making the rest of the world suffer for the corrupt / greedy few.
I bet England are just proud as punch thumbing their nose at it from the begining.

[jpd80]

Originally Posted by bundy

Yup the best thing EU can do is wind up the Euro and cut loose countries like Italy, Greece etc that are dragging it down. The One Currency dream is over, its just making the rest of the world suffer for the corrupt / greedy few.
I bet England are just proud as punch thumbing their nose at it from the begining.

It's not all the Euros fault, that just underscores the inequality in European states and how
disproportionate both wealth and manufacturing really is. Until Europe and its member states
can administer local monetary policy with discipline the whole thing is a farce hidden
behind walls of trade tariffs, local protectionism and strong unions.

[Yellow_Festiva]

Originally Posted by bundy

Yup the best thing EU can do is wind up the Euro and cut loose countries like Italy, Greece etc that are dragging it down. The One Currency dream is over, its just making the rest of the world suffer for the corrupt / greedy few.
I bet England are just proud as punch thumbing their nose at it from the begining.

I always had my theory about England and the Euro and the reason why they didn't adopt it. 1) The pound is an institution / symbol of the country and its strength and to remove it would be to remove its symbolic life blood. 2) People would then REALLY know how much more things cost there.

Deep down... I really hope they remove the Euro... but my reasons are selfish as I collect currency when I travel and.. well.. Europe is getting a bit repetitive...

[Brazen]

Originally Posted by Yellow_Festiva

I always had my theory about England and the Euro and the reason why they didn't adopt it. 1) The pound is an institution / symbol of the country and its strength and to remove it would be to remove its symbolic life blood. 2) People would then REALLY know how much more things cost there.

Thatcher was vehemently against it as it removed a lot of financial decisions away from the British parliament, hence the future of Britain would be determined by the Germans or the French. Because of her, the English Euro lost a lot of momentum and never went ahead.

Back to the article, I still think One Ford will be a disaster on a global level, the world car concept has failed everytime a mainstream motor manufacturer has attempted it. Tastes, wants, needs and finances are totally different amongst Asia, European and American countries - trying to build one car for all markets saves money in one market but destroys sales in another, I wouldnt be surprised to continue to see the North American market post profits whilst the rest of the Ford world continue to decline.

[Yellow_Festiva]

Originally Posted by Brazen

Back to the article, I still think One Ford will be a disaster on a global level, the world car concept has failed everytime a mainstream motor manufacturer has attempted it. Tastes, wants, needs and finances are totally different amongst Asia, European and American countries - trying to build one car for all markets saves money in one market but destroys sales in another, I wouldnt be surprised to continue to see the North American market post profits whilst the rest of the Ford world continue to decline.

I think there have been more failures than successes thats for sure. It is hard to find how many countries XYZ car model is sold in, but I think some models have been an absolute sucess due to their widespread sales success...

I have seen the original excel in almost every country I have been to, along with the original VW Beetle. VW Polo / Golf are pretty wide spread as well...

I remember reading that one of the Hyundai cars (i30??) was sold in 106 countries. 106!!! insane.

Haaaa... found something interesting... The first car Hyundai sold in Korea was a badge engineered Ford Cortina! Who would have known that???

[MethodX]

Originally Posted by bundy

Yup the best thing EU can do is wind up the Euro and cut loose countries like Italy, Greece etc that are dragging it down. The One Currency dream is over, its just making the rest of the world suffer for the corrupt / greedy few.
I bet England are just proud as punch thumbing their nose at it from the begining.

Hey Hey, Dont lump Italy in with Greece, Spain, Ireland and Portugal.
Italy actually makes things, things that people want.

England doesnt own anything anymore, its basically just a curency exchange place.

[XR Martin]

Originally Posted by MethodX

Hey Hey, Dont lump Italy in with Greece, Spain, Ireland and Portugal.
Italy actually makes things, things that people want.

.

Lols, Italy is in deeep *****. They arnt all called PIIGS for a reason...

Italy's debt far exceeds its GDP, which is just a ticking time bomb.

[MethodX]

Originally Posted by XR6 Martin

Lols, Italy is in deeep *****. They arnt all called PIIGS for a reason...

Italy's debt far exceeds its GDP, which is just a ticking time bomb.

Italys debt is more internal, its not as bad as those others which produce nothing and just take. Greece should be just sold to turkey.

But we will see hey...

[MAGPIE]

Can someone explain something please...

This thread talks about oversupply in Europe, so focusing specifically on Ford, why is there always talk on here how Ford AU cant obtain sufficient supply of European models hence they don't sell and feature well in the vfacts tables

I don't get it.

[RASER]

Originally Posted by MethodX

Hey Hey, Dont lump Italy in with Greece, Spain, Ireland and Portugal.
Italy actually makes things, things that people want.

England doesnt own anything anymore, its basically just a curency exchange place.

PREZACTLY!

If Italy was not so corrupt and the rich stop raping the poor, it should have had the firepower to be the top place in Europe.

But too many crooks, politians, Mafia, Vatican, tax dodgers, black market all with its own agendas

When Germans want the best, they buy Italian, even the CEO of Porsche purchased a Ferrari!

Bring back the Lira would do the place wonders

FIAT have shut down a auto-plant in the south for 3 months, no point building cars for no customers, missed the boat, last into the Chinese market, lots of catching up to do.

The funny thing is, tables have turned, Chrysler has saved its a/rse//***!

[Keepleft]

Originally Posted by bundy

Yup the best thing EU can do is wind up the Euro and cut loose countries like Italy, Greece etc that are dragging it down. The One Currency dream is over, its just making the rest of the world suffer for the corrupt / greedy few.
I bet England are just proud as punch thumbing their nose at it from the begining.

Some countries (EU states) cutting loose does make sense but today the Germans and French signal their desire for the Euro to remain as is by all member states, but perhaps domestic circumstance in Greece, Italy, Spain, Portugal we'll see it forced, but even when that happens, the whole global fiat currency system is severely faulty, and I expect an unravelling to continue a number of years yet, with perhaps, god forbid, a US unravelling circa 2014-16, though some experts predict 2013.

Patience I guess, the rides only warming up.

[Polyal]

Ive been told a third.....a third.

[Polyal]

That is not true at all...the germans have had world cars for decades and seem to do ok and would be killing it here if it wasnt for our tax system.

Im over one ford being banterd...the concept is nothing new at all..the yanks are just slow with everything they do, then once they do it they make a song and dance like they invented it.

Lol method..you can certainly include italy, they are as screwed as the rest. Dont stress..us convict outcasts are not far behind so you will be even closer to them.

[Brazen]

Originally Posted by Polyal

That is not true at all...the germans have had world cars for decades and seem to do ok and would be killing it here if it wasnt for our tax system.

Im over one ford being banterd...the concept is nothing new at all..the yanks are just slow with everything they do, then once they do it they make a song and dance like they invented it.

Luxury carmakers and sportscar makers are catering to a pretty particular audience across the globe.

Mainstream manufacturers are different, even Toyota and Honda build different cars for the different markets, you cant even get a Camry or Corolla in Europe, they have European specific cars instead.

[Polyal]

Bmw, merc are only seen as luxury because of their price tag, in reality the e class and 5 series are commies and falcons with a shedload more cash spent on them.

All the cars they sell are basically worldly cars..been happening since the day dot and it gives them the opportunity to make better cars through larger numbers. Give the locals the same budgets and volumes and the difference would be minimal.

[Yellow_Festiva]

No Camry / Corolla in Europe?? Certain about that??

Edit... Camry is almost not found in Europe but after a little research apparently they are being built and sold in Russia.

Corolla... Sold in Italy as the Auris.

http://www.toyota.it/cars/new_cars/auris/index.tmex

I guess you could also add Corolla as a 'Global car' as it is the best selling model in the world.