Reporting Jeff Gilbert
DEARBORN (WWJ) - Ford earned $1.6 billion in the third quarter, with record earnings in North America offset by problems in other parts of the world.
“We had a record quarter, actually at the company level.” said Ford Chief Financial Officer Bob Shanks. “Also our automotive sector profit was a third quarter record.”
INTERVIEW: WWJ AutoBeat Reporter Jeff Gilbert talks with Ford CFO Bob Shanks.
Ford made $2.3 billion in North America. That was the company’s best showing in its home market since it started publishing North American earnings in 2000.
“The Ford team delivered a best-ever third quarter, driven by record results in North America and the continued strength of Ford Credit,” said Alan Mulally, Ford president and CEO. “While we are facing near-term challenges in Europe, we are fully committed to transforming our business in Europe by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business.”
Ford lost $466 million in Europe. Losses in that part of the world have already totaled $1.2 billion. Ford has warned that it expects to lose one and a half billion dollars in Europe for the full year.
“There’s so much excess capacity across the industry in Europe,” said CFO Bob Shanks. “You’ve got the players over there resorting to pretty heavy discounting, to get as much product going through their plants as possible. So, there’s tremendous margin pressure.”
Last week, Ford announced a European turnaround plan that will mean three plant closings, and significant job cuts. But, Shanks said, European losses will continue for another year or two, until Ford starts showing a profit there by mid-decade.
“It’s something that we’ve planned for,” he said. “We went through the same thing here in North America over a couple of years. Ultimately, it all paid off. We expect that the same thing will happen in the case of Europe.”
Ford was just above the break even point in other areas of the world. It earned $45 million in Asia-Pacific-Africa. Ford South America earned $9 million.
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