Ford targets profit in Europe by '15

Automaker sees growing sales abroad amid recalls in U.S.

Workers for Magna Seating prepare fabric for cutting during the manufacture of seat covers for Ford Motor Co. at a factory in Odzaci, Serbia, in June. Ford said Wednesday that it remains on track to make a profit in Europe next year.
Workers for Magna Seating prepare fabric for cutting during the manufacture of seat covers for Ford Motor Co. at a factory in Odzaci, Serbia, in June. Ford said Wednesday that it remains on track to make a profit in Europe next year.

DEARBORN, Mich. -- Ford Motor Co., targeting an end to losses in Europe, maintained its forecast to return to profitability in the region by 2015, as it reported auto sales Wednesday for the first six months that outpaced the broader industry.

"We are very, very pleased with where we are on our European transformation plan," Stephen Odell, Ford's Europe chief, told reporters at the company's headquarters in Dearborn.

Auto sales in Europe are growing this year after falling to a two-decade low in 2013. The company has said it expects a smaller loss in the region this year and a return to profitability in 2015.

The second-biggest U.S. automaker's pretax operating loss in Europe narrowed to $194 million during the first quarter from a loss of $425 million during the same period last year.

Ford's sales in Europe this year through June rose 6.6 percent from a year earlier, outpacing industry growth of 6.3 percent, the company said. For the first six months, the automaker's market share in Europe, which it defines as 20 nations, was about 8 percent.

Ford shares rose 1.9 percent to $17.43 at the close of trading Wednesday in New York, bringing the stock's gain to 13 percent so far this year.

Ford hasn't earned a pretax profit in Europe since 2010, and it lost $1.6 billion in the region last year. But Odell said Wednesday that three plant closures and more than a dozen new products are helping reverse that.

Commercial vehicle sales rose 21 percent in June after Ford launched new vans, and Odell said Europe's first 500 Mustang sports cars sold out in 30 seconds.

Odell said the eurozone's high unemployment of about 12 percent inhibits the economic recovery there. He predicts a modest, slow recovery over four to five years.

Ford recalled 100,610 vehicles in North America on Tuesday for various safety defects.

The company announced the six separate recalls Tuesday. No injuries, accidents or fires related to any of the defects have been reported, Ford said.

The largest recall, of 92,022 vehicles, affects the 2013-2014 Ford Taurus, Lincoln MKS and Police Interceptor sedans; 2013-2014 Ford Flex and Lincoln MKT crossovers; 2012-2014 Edge crossover and 2014 Lincoln MKX crossover. Ford says the right-hand halfshaft, which is part of the axle, isn't properly seated and may disengage over time, making the vehicles inoperable. The vehicles are also at risk of rolling unexpectedly if they are parked without the parking brake on.

Ford will notify owners of the vehicles in the halfshaft recall by mail beginning the week of Aug. 25. In all of the cases, dealers will repair the vehicles for free.

Information for this article was contributed by Mark Clothier of Bloomberg News and Dee-Ann Durbin of The Associated Press.

Business on 07/10/2014

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