Go Further Down: A Proactive Ford Can't Keep Up With Tanking Europe
If you want to know in how big a trouble GM is in Europe, look at Ford. Ford’s European unit sales are similar to those of Opel. They also are likewise beleaguered. Ford’s EU sales were down 21 percent in February, Opel was down 15.8 percent. The big difference: While GM does not seem to be able to shed capacity anytime soon, Ford had taken swift action.
“Ford’s plan to cut jobs and close plants, once hailed as proactive, may not be enough to halt losses in Europe,” Reuters says today.
Initially, Ford was praised by analysts for closing three plants and laying off 6,200 workers. “But less than five months later, Ford’s slumping sales show it still has some way to go and may struggle to win back business from competitors as it rebuilds profitability,” Reuters says.
Ford sales are dropping faster than estimated. In the first two months of the year, they dropped more than twice the market decline. “The assumptions they made when they published their plan are no longer valid,” said Philippe Houchois, an analyst with UBS told Reuters.
If a proactive Ford can’t keep up with tanking Europe, if three pl;ants are too little too late, imagine indecisive Opel which has lost time and money for years.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The problem with Europe is the people don't have the money to spend on vehicles. It's quite simple. Sudsidising vehicle purchases is always the incorrect approach and so it protectionism, this will only inflame the situation. The German's aren't making huge money in Europe, but by exporting. The French aren't so lucky as they've had quite an insular policy regarding vehicles. Spain, Greece, Italy, Portugal and to a degree France not as many people can afford to buy into new vehicles. The rest of Europe is flat to slightly down. There is no money left. It will take at least several years for the European situation to resolve itself. Even when that occurs sales will not be what they used to be.
Ford sells garbage in Europe and sales tank. So what does Ford do? Sell that same garbage here. Bold moves indeed.
Ford is rolling the dice and betting that some of the other ditherers will remove enough capacity to allow Ford to grow again. Unfortunately, the buggers just won't die. Will they allow themselves to hang on or will they bite the bullet and shrink more?
@Marcelo de Vasconcellos On my last trip to Europe in 2010,(EIGHT Countries were toured) I counted SEVEN US Pickups. SIX Dodge Rams and a broken down F250 in Greece. Going on another European sojourn this year. Most interesting aspect was seeing SIX US Diesel Pusher Motorhomes and TWO US 5th Wheelers last trip. Previously I saw a lone Kenworth HDT from Romania. The expression as rare as "Hens Teeth" we use in Australia, does apply to US vehicles in Europe. I have yet to see a Corvette, but one must be there.