Ford Europe Shakes-up Leadership Ahead Of Restructuring.
“We forecast Ford Europe to post an accumulated loss of $3.6 billion from 2019 through 2021 with increased losses each year”
Ford Europe said it reshuffled its leadership Friday on the eve of expected news of a big shakeup in the loss-making organization.
“Ford is implementing key leadership and organizational changes to improve the fitness and agility of its European operations as it undergoes a fundamental reset and redesign of its business,” the company said in a statement.
Ford needs to undertake vigorous measures to sort out problems in Europe. Ford Europe lost $245 million in the 3rd quarter, compared with a loss of $192 million in the same quarter last year. Ford has said it expects a 2018 loss, after a profit of $234 million in 2017.
In a report this week investment bank Morgan Stanley said it valued Ford Europe at a negative $7 billion, up from a previous estimate of minus $5 billion.
In a report in October, Morgan Stanley pointed to big forthcoming losses at Ford Europe.
“We forecast Ford Europe to post an accumulated loss of $3.6 billion from 2019 through 2021 with increased losses each year. By 2021, our forecast of Ford Europe’s Adjusted EBIT margin is negative 4.5% which we estimate would make Ford the least profitable (manufacturer) in that market,” Morgan Stanley said in the report.
Ford Motor said in July it would spend $11 billion on a three to five year restructuring program. Europe is expected to see the bulk of the action with big job losses.
In its statement Friday, Ford Europe said Gunnar Herrmann was appointed executive director, Business Transformation, Ford of Germany, to lead implementation of Ford’s “Sprint to 6 Reset & Redesign” plan in Germany.
That plan refers to Ford Europe’s goal or reaching reach a 6% EBIT (earnings before interest and tax).
Sprint to 6
Graham Hoare was named executive director, Business Transformation, Ford of Britain, leading the reorganisation in the UK.
“The organizational changes support Ford’s Sprint to 6 Reset & Redesign plan in Europe to achieve a 6% EBIT margin, with a view to investing only in those vehicles, services and segments that best support a long-term, sustainably profitable business,” Ford said, without setting a date for the target.
Ford Europe has said it wants to concentrate on profit-making SUVs and vans and to cut loss-making vehicles. Ford has been discussing collaboration plans with Volkswagen, which so far have centered on vans. This might be extended to cover electric and autonomous vehicles.