[QODLink]
Business

Ford shares tumble on Europe's woes

US automaker forecasts $2bn loss in European market as prolonged recession hits sales.
Last Modified: 30 Jan 2013 02:33
While still selling strong in North America, Ford is struggling in recession-hit Europe [GALLO/GETTY]

US automaker Ford Motor Co has forecasted a $2bn loss in Europe this year, hurt by a recession that could drive down industry sales in the region beyond 2012's nearly 20-year low.

Ford said on Tuesday its sales outlook was deteriorating in Europe and the 2013 loss would be worse than the $1.75bn deficit in 2012. The automaker is closing plants and slashing costs.

By contrast, Ford, the number two US automaker, expects to earn more money in North America in 2013 and forecast 10 percent margins.

North America was its chief source of strength last year and helped it to beat Wall Street estimates in the fourth quarter.

Still, the overall outlook was weaker than some analysts expected. The shares fell 5.7 percent to $12.99, its sharpest drop since August 2011.

In South America and Asia, Ford expects to break even this year.

'Machine is broken'

Ford said industry sales last year in the 19 markets it tracks in Europe were the lowest since 1995.

 Ford announced last year that it will shut down 
its factory in Genk, Belgium by 2014

"We're likely to see, in the euro zone, a recession for the full year," Chief Financial Officer Bob Shanks told reporters after the company reported quarterly results.

"Clearly we still have some difficult times in front of us [in Europe]," Shanks said. "But we do think it will probably bottom this year."

Unlike Fiat-Chrysler chief Sergio Marchionne, who spoke alarmingly at the Detroit auto show that "the machine is broken" in Europe, Shanks believes there is still hope.

"It is possible to restructure the industry in Europe, but it will probably need fewer employees because there is excess capacity there," he told the Reuters news agency in a telephone interview.

"The harder things are just beginning."

Ford announced plans in October to close two plants in Britain and one in Belgium as part of a massive shake-up that includes the loss of 13 percent of the US automaker's European workers, some 6,200 jobs.

387

Source:
Agencies
Topics in this article
People
Country
City
Featured on Al Jazeera
At least 25 tax collectors have been killed since 2012 in Mogadishu, a city awash in weapons and abject poverty.
Tokyo government claims its homeless population has hit a record low, but analysts - and the homeless - beg to differ.
3D printers can cheaply construct homes and could soon be deployed to help victims of catastrophe rebuild their lives.
Lack of child protection laws means abandoned and orphaned kids rely heavily on the care of strangers.
Featured
Booming global trade in 50-million-year-old amber stones is lucrative, controversial, and extremely dangerous.
Legendary Native-American High Bird was trained in ancient warrior traditions, which he employed in World War II.
Hounded opposition figure says he's hoping for the best at sodomy appeal but prepared to return to prison.
Fears of rising Islamophobia and racial profiling after two soldiers killed in separate incidents.
Group's culture of summary justice is back in Northern Ireland's spotlight after new sexual assault accusations.