Ford Europe in Crisis ?: Dissatisfaction from the USA

A The year as a whole is calculated according to a report by the manager Magazine in Europe with red numbers. Not a good result after a profit of $ 234 million in 2017.

Brexit hurts Ford

But why this crash? Ford CFO Jim Farley recently mentioned the unfavorable exchange rate of the British pound in the Automotive News. The currency is crashing after the Brexit announcement, bad for the largest European Ford market, which is also still weak in 2018. But also in terms of model policy there is a lot going on at Ford.

Currently, they want to crank up commercial vehicle sales and also expand the range of SUVs to make up for the losses. Ford also stopped investing in traditional sedans in the US. This primarily concerns the fusion, on the basis of which the Mondeo is offered here. So it's questionable what the future of middle graders will look like. The decision to take the minivan C-Max out of the program seems almost fixed, which according to Farley does not meet expectations.

First restructuring talks

Ford's strategy in According to the Manager Magazin report, Europe is geared towards cutting costs and achieving a profit margin of six percent in the long term. The newspaper quotes the head of the general works council, Martin Henning: There is currently “no advice or discussions on restructuring”, but they do not want to participate in speculation.

In Germany, after all, Ford has expanded its market share - including in the case of commercial vehicles. In the first half of the year, sales increased by 5.7 percent. However, these figures do not make up for the decline in sales in Great Britain.

High sickness rate in Cologne

Nevertheless, not everything at Ford in Germany seems to be all right. Works council chief Henning states: With increasing market shares and better sales prices, profits should actually bubble up, 'Unfortunately no, because the costs eat up almost everything again'. It is still unclear where exactly these arise. The “peculiar system that is used by our finance department prevents a real overview of total costs”, criticizes Hennig.

The works council has therefore started an initiative together with the German management to secure the locations. This will “involve a lot of changes”, says Hennig, “from all of usmaximum flexibility is required. We all have to face these challenges together and work actively to maintain our locations ”. That sounds, so the Manager Magazin sums up, after an upcoming renovation. Especially when you consider the return on sales of the German plants in the first half of the year. It is only 1.3 percent, which is far from the targeted six percent. In addition, the sickness rate in Cologne is 11.8 percent, well above the industry average of 5.4 percent.

No commitment to SUVs from Germany

Ford

The Ford Bronco is being reissued.

After all, Ford USA is still investing in Germany. 300 million euros went into the production of the Ford Fiesta, 600 million for the production of the Focus in Saarlouis. However, there is probably no clear commitment from the USA to the production of SUVs in Germany. 'The development and production plans show nothing that would point beyond the current Fiesta and Focus models,' criticizes works council boss Hennig in 'IG Metall @ Ford'. SUV and crossover models for Europe roll off the assembly line in Spain and Romania. Accordingly, according to Manager Magazin, the German Ford workers could have a “hot autumn” ahead of them.