Ford warns of deep Europe cuts as profits take hit

AFP, 25 July 2012

Ford Motor Company warned of major cuts to its European operations Wednesday as heavy losses there cut into the second largest US automaker’s profits.

Chief executive Alan Mulally said Europe’s troubles run deeper than the current economic crisis and cautioned that all automakers 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.

“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 $1.0 billion following a $404 million loss in Europe.

It forecast that the troubled European unit will post a loss of $1 billion this year, dragging total profits significantly below the 20.2 billion Ford posted in 2011