Should Ford & GM exit Europe? - Autosavant [Archive] - Ford Inside News Community

: Should Ford & GM exit Europe? - Autosavant

03-25-2013, 02:08 AM
GM and Ford Should Exit Europe - Autosavant
By Chris Haak on March 22, 2013 (

...letís look at the auto industry in Europe. Itís a complete disaster. There are too many plants, not enough sales, and too many brands. Sounds a lot like GM, Ford, and Chrysler, circa 2006, doesnít it? (Except of course weíre talking about a bigger picture, since this is the eurozoneís auto industry). Capacity needs to be removed from the system.

One way to do that is to close a few plants. GM and Ford are doing that; we reported earlier this week that closing its Genk, Belgium plant and displacing that plantís workers will cost $750 million USD, which is a not-small sum of money. GM announced yesterday that itís closing its Bochum, Germany plant in late 2014 after workers there rejected a cost-saving agreeement. That will cost GM a fortune...

...When I alluded earlier to the effect that dumping Opel might have on GMís stock price, such a move has actually been quantified by Morgan Stanley (and reported by The Economist) back in September 2012. The result: Opel is likely to lose even more money over the next 12 years than it did over the previous very ugly 12 years. Morgan Stanley assigned a value of minus $17 billion to Opel. If theyíre correct, it means that just having the Opel albatross around GMís neck is pulling the stock price down by about $10 per share...

...Shuttering Opel would partially solve the capacity problem for Europeís automakers (though probably not completely), which would be GMís gift to its competitors in the Old World. But even more, it would finally put a tourniquet on a wound that has been bleeding GM dry for more than a decade Ė and will likely continue to do so for years to come.

Ford Too?
Though not in as much of a crisis as GM is in, Fordís European operations are still a mess...
...with the backdrop of collapsing sales, three plant closures are still likely not enough to get the companyís European operations back in the black. That means either further losses in coming years, or further capacity reductions (which means layoffs and/or plant closures).

Would Alan Mulally like to insulate the parent company from Ford Europeís $2 billion loss? Iím sure he would. But just as GM is likely thinking, Ford has a long history of selling cars in Europe (not to mention developing them there, and now for global markets) and it would not be easy to just hack off Europe, pay some severance money, and move on.

...Europe looks terrible economically Ė not just in the car business, but certainly the car business is feeling the effect of austerity measures put in place by governments, runaway unemployment (Spainís unemployment rate is a staggering 26.6 percent!) and the huge overhang of public debt. Europe is years (if not more than a decade) away from fixing its structural problems... ...If I were the CEO of GM or Ford, Iíd have my staff working on contingency plans to get the **** out...

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04-08-2013, 12:40 PM
European car sales are dropping. Not a good sign for ford and GM but also for everyone else.

04-08-2013, 01:12 PM
Simply, no! Too much to lose in terms of sales numbers for lines of vehicles.

Sent from App (

04-08-2013, 02:09 PM
Yes they could lop off the Euro divisions but that would reduce their volume efficiencies, which would in turn further reduce how profitable they are in their other markets. If Ford were still producing different vehicles in their different markets then this might have made sense. Given the One Ford strategy they really need to just weather the storm and be thankful that their other markets are healthy at the moment and afford them the luxury of waiting on the EU to get its act together.

04-08-2013, 02:46 PM
I hope the title here is not serious.

06-06-2013, 04:12 AM
I hope this is not a serious title..

Logans Run
06-06-2013, 09:27 AM
They just spent all that money to 'globalize' vehicles...There is no way they will exit now.

10-25-2013, 10:56 AM
I don't think they should remove themselves, they just need to globalize, and eliminate that tumor they call Opel (for GM). Angus Mackenzie from Motor Trend said the same thing. GM needs to figure out what to do with their blood-sucking Opel brand.

10-25-2013, 12:11 PM
And I don't know if it's a valid argument, but wouldn't dropping out of Europe hand marketshare to competitors, who could use the revenue to strengthen their lineups and compete even better in other Ford and GM markets? Seems like a pretty silly article to me. If Ford cancelled all but the F-150 in the US, for a brief moment they could show HUGE profits... but automakers have to think very very long term, and I'm not sure ducking out of Europe is a smart idea.

10-25-2013, 01:56 PM
I hate gotcha headlines.

There is a huge difference between exiting and scaling back.
I did not bother to read the whole rubbish article based on that BS.

10-25-2013, 05:05 PM
Ford may be losing money in EU currently but to shutter it completely will have cost effects company wide as efficiencies of scale will be reduced under the One Ford plan. Should Ford abandon EU? No.

11-29-2013, 08:26 AM
a sudden change in the scenario does not guarantee that it is going to prevail for long .. instead keep up on basics is wise though to stick with

12-28-2013, 04:18 AM
it may be a right decision as the auto-makers think tank certainly would have thought upon the issue well before taking initiatives .. and it is to see for what the outcome it would turn out to the firms