This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

What Will Ford Do in Slower Europe? Grow, Grow, Grow

Stocks in this article: F

AMSTERDAM ( TheStreet) -- How does Ford (F - Get Report) respond to the sharp downturn in Europe's economy?

It's easy: roll out new products. On Thursday, Ford unveiled a half dozen new products for the European market, including a new Fiesta, a new Mondeo, new small SUVs, a newly designed Transit Connect and even an American icon, the Mustang, that will come to Europe. Ford plans to sell 15 new and redesigned vehicles in Europe over the next five years.

The Alan Mulally playbook has a page on this, of course -- in a 2009 interview with TheStreet, the Ford CEO declared: "The way to survive is to reduce your production to the real demand (and) at the same time accelerate the investment in new products so that when you come out on the other side, you are there with the vehicles that people want."

Nothing has changed. "Ford took a point of view nearly six years ago that we wanted to serve all our customers around the world with a complete family (of vehicles)," Mulally said Thursday, at the product rollout in Amsterdam. "We are going to invest and continue to invest even through recessions."

Added Stephen Odell, CEO of Ford in Europe: "Despite the economic crisis, we are investing in the future. We want to make the statement loud and clear that we believe there is a great opportunity in Europe.

"The economic and business conditions we face are brutal," Odell said. "We don't expect things to get easier anytime sooner." Still, Ford expects the European market to grow 20% to 23 million vehicles over the next five years.

"As some may back off, Ford is increasing its investment," Odell said. "We will be aggressive in increasing our share."

During Ford's second-quarter earnings call in July, Mulally and Chief Financial Officer Bob Shanks made it clear they will take action to halt losses in Europe. During the quarter, the pretax operating loss in Europe was $404 million, and Ford said projected full-year losses in the region will exceed $1 billion.

"We absolutely have overcapacity now," Mulally said then. "We're bringing production down because demand is not there." He also emphasized, however, that Ford's solution in Europe will include not simply cost reductions but also revenue gains largely generated by new product introductions.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs