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GM and Ford Europe forecast better times for shareholders in 2004

Speaking at the Geneva Show, Ford Europe president Lewis Booth confirmed the company's forecast of a pre-tax loss for this year before restructuring charges of between $100m and $200m. Booth also said Ford would cut fixed costs in Europe by $450m this year.

These figures would compare very well with Ford Europe's $1.1bn loss in 2003, even with restructuring charges of $162m in the first half. Lewis Booth also suggested that further job cuts were unlikely beyond the 1,600 still outstanding from last year's approx. 6,700 announced; 3,000 jobs, over a third of the plant's total, were announced to be under the axe at Ford's Genk plant in Belgium last autumn. Ford is betting on a European light vehicle market of 16.9m this year, down only slightly from last year's 17m units.

GM's Rick Wagoner told media at the Geneva show yestterday that he expects GM Europe to break even this year, aided by the new Astra and cost reductions effected under the Project Olympia plan. GM Europe recorded a loss of $286m in 2003.

GM and Ford, both importers from Asian and Japanese plantsthemselves, noted the beneficial effect on Japanese volumes in Europe of the rising euro. Wagoner complained that the Japanese were enjoying an unfair margin advantage of 20-30% thanks to the Bank of Japan's 'billions of investment' in pushing up the dollar and the euro against the yen.

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