Ford Searches For European, South American Answers

DETROIT: Feeling that it has its North American automotive operations in a good groove, Ford will focus its energies on revitalizing its European and South American operations, Ford vice chairman and CFO Wayne Booker told analysts this week. "Improving our results in these areas is our top priority," Booker said during a conference call Oct. 18. "We're not competing with the best [companies], and we have a long way to go [to be more competitive]." Booker predicted that it would take "two to three years" to put its European operations in the black. He cited replacements for the company's Transit van and Mondeo sedan as well as settling issues relating to pricing convergence as key factors in making that turnaround happen. He said price convergence -- making all pricing across the European Union consistent -- isn't the only problem on the continent, nor would it be the primary reason for any type of turnaround there. Reducing cost structure there would be much more important, and that is one of the company's focal points. Ford lost $171 million in Europe during the third quarter but has earned $83 million for the year to date. Booker also hinted that low capacity utilization, currently hovering at 70%, could result in a plant closure in the near future. Booker seemed lost when attempting to outline a strategy to return Ford's South American operations to profitability. Ford lost $72 million there in the third quarter. Brazil is the toughest market for the automaker. Ford lost 4% of its market share there in the third quarter, dropping to 8.5%, and not everyone is certain why. Booker cited the introduction of Renault into the market, which took 1.3% of share, while Fiat also had a good quarter.