Ford Revamps European Lineup
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AMSTERDAM — (WWJ) Ford says it’s re-doing its European product lineup as it works to return that part of the world to profitability.
“Despite the economic crisis, we are investing in the future,” says Ford of Europe Chairman and CEO Stephen O’Dell.
O’Dell and Ford CEO Alan Mulally hosted a lengthy session in Amsterdam for dealers and other European stakeholders. It included revamped versions of a number of European mainstays, like the Fiesta, Kuga and Mondeo, plus some all-American surprises.
“Mustang, the American icon is coming to Europe.”
Ford gave no specifics, other than to say it will be the next generation Mustang, which is expected to come out in 2014, the vehicle’s 50th anniversary.
“Volume for a European Mustang is not going to be huge,” said Aaron Bragman, an analyst with IHS Automotive. “Most likely it’s good news for the Flat Rock plant.”
The Mustang is currently build at Flat Rock, Michigan plant where Ford had a joint venture with Mazda. Mazda production ended last month. Ford is expected to talk about the future of that plant at an event on Monday.
Bragman was generally impressed with the products that Ford is bringing to Europe.
“We saw a similar kind of event in North America a few years ago. It kind of boosted their image,” he said. “People now had a lot of expectations for Ford.”
CEO Alan Mulally said they will use the lessons learned here in North America to turn around operations in Europe.
“The most important thing we can do is acknowledge the current reality, and develop a plan to deal with it.”
The current reality includes big losses. Ford estimates more than a billion dollars worth of red ink in Europe this year alone.
“The economic and business conditions we face are brutal, no question about it,” said Ford of Europe’s Steven Odell. “We don’t expect things to get easier anytime soon.”
Part of Ford’s strategy is to put more European vehicles on global platforms, as it did in the U.S. Odell expects to have 71 percent of their European lineup on those platforms in six year. That number now is 43 percent.
“We will transition from being a European brand, to being a global brand in Europe.”
Absent from today’s discussion was talk about cuts in Ford’s European operations. Those need to be negotiated with unions and governments. But, analysts say Ford has to cut back operations in Europe to meet a smaller long-term demand.
“There’s going to have to be a rationalization of production plants,” says IHS Automotive’s Aaron Bragman. “You’re going to probably see things closed. You’re going to see things consolidated.”
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