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Ford says European division will be profitable in 2008; Volvo faces greater struggle
By Jennifer Lanning Drey
Portland, Ore., Oct. 1 - Ford Motor Co. expects Ford of Europe to be profitable in the second half of 2008 leading to a better full-year profit than the segment posted in 2007, John Fleming, chief executive officer of Ford Europe, said during a Wednesday presentation at the Paris Motor Show.
However, Ford Europe's profits in the second half of 2008 are likely to be lower than the same period of 2007 as the company is now facing a heightened slowdown in the major European economies combined with continued oil and commodity price pressures, Fleming said.
"Ford of Europe is solidly profitable and while we plan to build on the profitability, my expectation is the pace of growth will slow a little given the external environment," he said.
At the same time, Fleming said Volvo's outlook for the remainder of 2008 is grimmer as Ford Europe expects Volvo to continue to be negatively effected by unfavorable currency and the global economic downturn, which is slowing the pace of growth in markets such as China and Russia.
"This is a difficult time for Volvo and for premier manufacturers in general," Fleming said.
Volvo continues to implement its business plan, which aims to return to sustainable profitability. The company also continues to focus on emerging markets and is leveraging its technologies and business relationships to operate on more of a stand-alone basis from Ford, he said.
Additionally, Volvo has implemented a restructuring plan to right-size the company to match with the prevailing market conditions.
Ford Motor Co. is a Dearborn, Mich., automobile manufacturer and distributor.
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