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May 23, 2013, 6:26 a.m. EDT
As Ford Exits Australia, a Lesson for U.S. Car Company Plans in Europe
By 24/7 Wall St.
Ford Motor Co. (NYSE: F) did the right thing in Australia, at least financially. It will stop building cars there. Its business in the country cannot work financially, the company says. It is a lesson to the American car companies that do business in another market where they operate in the red - Europe. The Australia move is a template for what Ford and General Motors Co. (NYSE: GM) need to do in the world's most economically troubled region, which is, like Australian, also one in which labor costs are too high.
Ford, and GM to a greater extent, believe they need to stay in Europe for strategic interests because the market is so large and eventually will recover. That recovery could be many years off, and it will not bring down GM's costs. Neither will it reverse GM's market share decline or recover the losses it has incurred in Europe for well over a decade. Ford was smart enough to abandon a region where it had no hope of a turnaround. GM should make same move in Europe.
Bloomberg reports that GM has lost $18 billion in Europe since 1999. After posting a full-year loss of $1.8 billion last year, the largest U.S. car company said it would lose another $2 billion this year. And, as the overall market in Europe continues to shrink, GM's part of that shrinking pie has dropped sharply. The AECA announced that in Europe overall sales fell 7.1% in the first four months of this year. GM's sales have been worse than most of its competitors over that period. Its unit sales have fallen 10.5% to 317,546. In contrast, rival Volkswagen's sales are off only 3.4% to 997,186.
GM is in a losing game in Europe, as Ford was in Australia. Like Ford, it should cut its losses and run.
This blog is reprinted by permission from 24/7 Wall St, © 2007 24/7 Wall St., LLC All rights reserved.
Link...
http://www.market-watch.com/story/a...pany-plans-in-europe-2013-05-23?Link=obinsite
*just take the dash of Market-Watch on the URL, copy and paste on browser*
If this is true, Holden could be in the chopping block; same fate as Pontiac?
BTW... What is up with the censorship filter? You cannot even post a link
As Ford Exits Australia, a Lesson for U.S. Car Company Plans in Europe
By 24/7 Wall St.
Ford Motor Co. (NYSE: F) did the right thing in Australia, at least financially. It will stop building cars there. Its business in the country cannot work financially, the company says. It is a lesson to the American car companies that do business in another market where they operate in the red - Europe. The Australia move is a template for what Ford and General Motors Co. (NYSE: GM) need to do in the world's most economically troubled region, which is, like Australian, also one in which labor costs are too high.
Ford, and GM to a greater extent, believe they need to stay in Europe for strategic interests because the market is so large and eventually will recover. That recovery could be many years off, and it will not bring down GM's costs. Neither will it reverse GM's market share decline or recover the losses it has incurred in Europe for well over a decade. Ford was smart enough to abandon a region where it had no hope of a turnaround. GM should make same move in Europe.
Bloomberg reports that GM has lost $18 billion in Europe since 1999. After posting a full-year loss of $1.8 billion last year, the largest U.S. car company said it would lose another $2 billion this year. And, as the overall market in Europe continues to shrink, GM's part of that shrinking pie has dropped sharply. The AECA announced that in Europe overall sales fell 7.1% in the first four months of this year. GM's sales have been worse than most of its competitors over that period. Its unit sales have fallen 10.5% to 317,546. In contrast, rival Volkswagen's sales are off only 3.4% to 997,186.
GM is in a losing game in Europe, as Ford was in Australia. Like Ford, it should cut its losses and run.
This blog is reprinted by permission from 24/7 Wall St, © 2007 24/7 Wall St., LLC All rights reserved.
Link...
http://www.market-watch.com/story/a...pany-plans-in-europe-2013-05-23?Link=obinsite
*just take the dash of Market-Watch on the URL, copy and paste on browser*
If this is true, Holden could be in the chopping block; same fate as Pontiac?
BTW... What is up with the censorship filter? You cannot even post a link
