Geneva Motor Show: Ford Europe Restructuring Results in $450 Million in 2004 Savings

DETROIT March 2, 2004; Sharon Silke Carty writing for Dow Jones reported that Ford Motor Co.'s European restructuring efforts will save the company $450 million in 2004, Ford Europe President and Chief Operating Officer Lewis Booth said Tuesday.

Speaking at the Society of Automotive Analysts conference, broadcast on the Web from the Geneva Auto Show, Booth confirmed earlier predictions that the division would post a 2004 pretax loss, before restructuring charges, of $100 million to $200 million. Ford Europe had a $1.1 billion loss in 2003.

The company has focused on trimming its work force, improving its cost structure and boosting the quality and appeal of its products, Booth said. In 2004, spending will be down 28% compared with 2003.

Ford Europe will continue cutting jobs, with 1,600 set to be eliminated in Britain and Germany in the first half. Those moves will save the company $450 million in the first year, and $550 million a year thereafter, Booth said.

Still, Ford Europe will continue working on having products with "emotional appeal."

"We are not going to cost-cut ourselves to prosperity and not have the products" customers want, Booth said. Ford Europe recently named Martin Smith, chief of design for General Motors Corp.'s Opel and Vauxhall units, as its new design director.

Booth said Ford Europe expects industrywide sales will reach 16.9 million for 2004, slightly down from the 17 million sold in 2003. Net pricing - which calculates how much a car or truck sells for when incentives are deducted from the price - should be down slightly this year, indicating incentives may increase.

Currency changes should also affect the market. With the yen continuing to remain very weak compared with the euro, Japanese automakers are beginning to make "significant inroads" in Europe, Booth said.