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Ford's Shanks: Despite Loss in Europe, We Still Made a Profit

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    Ford Motor Company CFO Robert Shanks on challenges in Europe.

  • Duration 5:16
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Cigarette afford shares right now this -- -- to a one year -- at this comes after Ford is reported that it doubled its European losses.

More than one billion dollars now while the company announced better than expected second quarter profits.

The question becomes can better sales in North America actually make up for the dismal numbers in Europe.

This claiming joins us now with Ford's side.

Of the story -- -- -- -- nice to say can better US -- cover up something that's bad certainly because that's good news but no way around it.

Europe ruin the company's strong story line of the past five years at least temporarily.

Which has been one of steady improvement what's the strategy as the company chooses this quarter to put a very public face.

Not on CEO Alan Mulally but -- chief financial officer Bob shanks we got.

Bob thanks to the program good to have you sir thank you for being here.

Thanks I'm glad to be -- -- to face is okay the face looks great okay okay.

-- in -- under those circumstances Bob even better than what we would have expected but even the stock is relatively holding up under the news that.

The losses for this year you guys are now saying will double but specifically because of Europe.

I need people to know how important -- -- in Europe the sales are second best only to Volkswagen so.

How much worse do you anticipate this getting in Europe.

OK so why am I smiling and smiling because we actually had a solid quarter so despite the loss of about 400 million dollars that you mentioned and Europe.

We did make a 1000000008 and total and it was driven by really excellent results in North America which you commented on them.

But we clearly have challenges in Europe and we feel a lot of confidence around our -- to address those issues in the years ahead.

-- the plant let's get to that -- I don't know how detailed likened to force you to get -- -- that we we were looking at the map and we saw.

How many plants you guys do happen here if you've got.

One in the UK two in Germany one -- delta I noticed one in Valencia Spain where they're in big trouble they can't even pay their government services at this point.

Will you.

Temporarily shut down plants in Europe reduce capacity.

Lay off workers what are you doing there.

Well as you pointed out earlier Europe's very important to -- we are the second.

Largest selling brand in Europe it's about a quarter of our total volume around the world -- about a quarter our revenues so it is important and it's invaluable part of -- We already have taken action to bring our production down to levels of current demand.

And we're taking other actions that we can a near term basis and -- and in order to improve the results of the extent that we can.

But this is clearly driven by the external environment.

We're -- we're going to have to.

To take some actions both on the revenue side in the positive sense product.

But also on cost structure in order to.

But a strong foundation under a business there to drive the business -- profitably in the future and there were prepared to do that.

OK but are there.

Discussions at the highest levels including the CEO Alan Mulally that at some point you may have to close one of those plants.

Well as as we set today we're not gonna get into any specific.

We think about what we might do in the types of things that would be on the table you can go back and look at our North American.

Actions that we've taken over the last five or six or seven years and -- we -- today and -- -- America that they were they were absolutely.

And and we're gonna take that same.

You know that same plan to Europe Tim I think we know how to -- and we know what works and we have like confidence around.

Turning that business around in the years had.

But China let me get to that as we take it beyond I know -- June auto sales in China were up 18% but China's implementing car quotas now they wanna.

Cut down on emissions -- -- -- are are you feeling concerned that.

It's not going to be anything for does or doesn't do -- that the government may -- to hurt your China sales.

Not really my they they are taking actions and some of the larger cities -- there's lot of congestion or control.

Traffic and -- and pollution you're actually right.

But the of the size of the total industry -- so huge it's you know it's over eighteen million.

Units at least that's our call for this year.

And we expect it to become even larger as sort of the tier two and tier three cities start to come on stream in terms of if the levels of income that you need to to generate decent sales.

So we're very optimistic about are opportunities there.

As we finish up there is something different this earnings call around and that is that it's you would not the CEO Alan Mulally who who will be doing these earnings interviews from now on.

Should I read into that that he's one step out the door he's got the leg out -- once again.

Had kept to the -- -- he's been on many times and we ask him but this is a change Bob does this mean that he's sort of shift -- shifting to use your language and.

In the -- world.

No I think about it this way you know the fourth element of our plan is working together leveraging our global assets well he's working together with me and he's leveraging these -- So I guess I'll do what he asked me to do -- I do it as as best I can.

You know what he's saying it's not your problem Bob.

Talking to the reporter.

Thank you very much it's gonna all of -- opportunities thank you thank all the -- as the chief financial officer at four did you guys in and you see the -- well it is down slightly with those.

Pretty ugly European numbers for the entire year could have been a lot worse maybe people are --

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