Ford Motor Co. saw a bad European sales quarter coming, reports The Detroit News. However, it had no idea how terrible things would get. The automaker promises to nearly double its loss prediction into multi-billion dollar territory. Are you looking to buy or sell a new or used Spokane WA Ford Escape
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!Profits not as high
In the second quarter of 2012, Ford lost $465 million globally, $404 million of which came from Europe. Ford recorded a global profit of $1 billion in the quarter, which, in contrast to year over year profits, was a 58 percent drop. In the quarter, Ford projects a pre-tax profit of $8.8 billion, which is about the same as 2011 but not as good as envisioned.
The quarter's $1 billion profit led to an earnings-per-share of 26 cents for Ford, a 59-cent drop compared with the previous year. Wall Street had forecasted 28 cents per share, according to a survey by 16 analysts at Thomson Reuters.Not good for Ford
Last month, Ford revealed that it expected losses of $570 million internationally during the quarter, which would be a whopping three times worse than the previous quarter of 2012. Again, 80 percent of the losses were set to come from disappointing European Ford sales. Over the first half of 2012, Ford sales in Europe dropped 10 percent, according to sources.
Allan Mulally is the Ford CEO who explained that Ford is not alone. Europe has been hurting other U.S. car makers as well.
"We are assuming that this is a structural issue," Mulally said. "It's not going to come back fast and be saved by volume. I think you're seeing the same viewpoint from most of the automobile companies."Possible Ford facility closures
There are rumors that Ford will close down the Southampton, England plant or Genk, Belgium plant because of the European sales sinkhole. Ford is anticipated to have to do something. Ford CFO Bob Shanks said that the business is ready to cut down in layoffs and shorter work days but would not talk about any potential plant closures.
"We always have to have a base assumption," Shanks said. "There's always volatility in our business. As we develop our plans … you've got to build in enough of a cushion … to be satisfied you will be profitable in an environment that is less robust than the assumption."
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