Like General Motors' Opel division, Ford of Europe is integral to the automaker's engineering operations. However, overcapacity, high labor costs and low profit margins have spelled long-term disaster unless something drastic is done.
Ford's other global operations are, by and large, profitable, but Ford of Europe is a large enough division that it makes a substantial dent in the automaker's overall picture. With losses growing in Europe, Ford says that it won't match last year's $8.8 billion pretax operating profit.
But Ford isn't just planning to cut its way out of debt in Europe. Rowley confirmed that Ford is looking to reshape its product portfolio in Europe in order to make money.
Just what this means for both the short and long-term is unclear.
Like GM and other global automakers, Ford refines its products in its engineering labs across the globe. But Cologne, Germany-based Ford of Europe has taken the lead on most of Ford's smaller car efforts over the last few years, including the Fiesta, Focus (pictured), Escape/Kuga and C-Max models that are sold in North America. Most Fords designed and engineered primarily at the automaker's Michigan headquarters are intended primarily for the North American market, which makes Ford of Europe the automaker's dominant global engineering department.
Ford of Europe has already consolidated vehicle platforms, meaning that cars like the Focus and Escape essentially ride on the same chassis and share engines and transmissions. That's a move that undoubtedly cut costs, but Rowley says that Ford needs to go further if it wants to turn around in Europe.
