Ford Europe to book $1.2 billion pretax loss for 2014
29 September 2014
, Dearborn, Mich. (MarketWatch)http://www.marketwatch.com/story/ford-europe-to-book-12-billion-pretax-loss-for-2014-2014-09-29Ford Motor Co. gave a mixed view of its future Monday, saying recalls in the U.S. and economic conditions in Europe will weigh on profitability, while Asia represents a “substantial growth opportunity.”
During an investor presentation near its headquarters in Dearborn, executives rolled out plans for an arsenal of new products--including an aluminum-bodied Super Duty line of heavier pickup trucks.
The products are aimed at helping the auto maker grow volume and capture market share in most of the regions it does business.
However, executives gave a gloomier-than expected view of its operation in Europe, which has been losing money.
The company’s Europe chief, Stephen Odell, said the company will lose $1.2 billion in the region this year on a pretax basis, and will follow that up with a pretax loss of $250 million next year.
Odell acknowledged the results are below prior projections of a profit in Europe next year.
Weakness in Russia and changes in interest rates are key reasons results will be worse than initially expected.
He said Ford will continue to aim for profitability in Europe next year, but at the moment projecting black ink isn’t possible.
He also said margins by 2020 will be lower in Europe than initially expected.
Ford F, -7.47% sees a brighter near-term picture in Asia, where it expects to post a $700 million pretax profit in 2014 and improved results in 2015.
Long-term, the company expects Asia to play a much bigger role in the company’s profitability.