Is Ford withdrawing from Europe?
Author: Mario Schmidtgen
Savings of 25.5 billion dollars
US carmaker Ford is facing a corporate restructuring in order to reduce their costs. In addition to China, business is particularly bad in Europe. Due to that, savings are expected at the European headquarters in Cologne.
Possible withdrawal from Europe
“Ford needs to solve a structural problem in Europe and thereby everything is conceivable and possible” says industry expert Ferdinand Dudenhöffer from the University of Duisburg-Essen. Dudenhöffer even expects the withdrawal of Ford from Europe: “I would not exclude that in Dearborn scenarios for a possible exit from Europe are discussed.” Recently, the US General Motors retired with the German subsidiary Opel from Europe.
Numbers alert the board
The top executives at the headquarters in Dearborn are worried: “We are extremely dissatisfied with our performance in Europe and China” said Jim Hackett, chief executive officer, after second-quarter results. “We did not plan with such results” told Hackett in a conference to financial analysts.
By the end of June, operating income decreased by $ 195 million compared to the previous year. The loss of the quarter was $ 73 million. For the whole year 2018, a minus is predicted. However, they would work on the costs, they would “aggressively attack” them, said the group in July. The investor meeting in September was postponed until the corporate restructuring was planned in more detail.
Savings of billions in 4 years
Hackett became CEO of the company in 2017. In particular, the 63-year-old was supposed to promote the development of future technologies, such as robotic cars and electric drives. But now Hackett is busy with the reorganization of the group, because by 2022 they want to save $ 25.5 billion.
European headquarter does not comment
At Ford in Cologne, there is no information on the concrete measures to reduce costs or the sale of the European business. The quarterly result was attributed to the increased costs due to emissions regulations. Unfavorable exchange rates, especially the British pound, are also a trigger. However, Ford had “continued its growth course” in the first half of the year.
Head of the works council Martin Henning demanded for the location of Cologne, the production of another model in addition to the Fiesta. Moreover, cutting costs should not just be about personnel costs: “A strategy that uses more equal parts on the vehicles would help.”