Ford Pledges to Reverse Losses in Europe

Ford Motor Co. is preparing a restructuring plan to stem losses at its European unit with "great urgency," says CFO Bob Shanks. The company now expects to lose more than $1 billion (€827 million) in Europe this year, roughly double its previous forecast.

Shanks tells analysts Ford will disclose a new business plan for the region at an unspecified date. He adds that it is "premature" to discuss potential closure of factories in the region.

CEO Alan Mulally says the company will include all stakeholders, including its unions, in restructuring talks. Ford isn't counting on a rebound in the European market to save the unit because its problems are largely structural, according to Mulally. He insists part of the solution is to boost revenue with new products.

The company's near-term response to losses in Europe includes cutting marketing spending in the region, dismissing temporary workers and keeping inventories in line with demand by reducing production hours and slowing assembly line speeds.

Ford's European unit, which posted a $149 million (€123 million) pretax operating deficit in the first three months of this year, lost an additional $404 million (€334 million) in the April-June period. The company's market share in the region declined 0.6 points year over year to 7.7% in the second quarter.