Ford Warns of 2012 Being Dragged Down By S. America, Europe, and Asia

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Ford Motor Co. (NYSE: F) is still the great America car company, but the growth markets are not going to deliver for it in 2012.  in fact, the company noted in an SEC Filing that CFO Bob Shanks warned in an interview with the New York Times that it would be profitable in the second quarter based on strong North America sales and its credit, but…

Shanks noted that the combined results for South America, Europe, and Asia Pacific Africa “could be a loss of about three times as much as the $190 million pre-tax loss incurred by these operations in the first quarter.”  Ouch.

The challenges are called somewhat different by region. Shanks said, “Ford South America is facing growing competitive and pricing pressures, as well as weakening currencies and unexpected and adverse changes in government policies affecting areas such as trade and access to foreign currency. In Europe, the situation has deteriorated significantly since we gave our guidance at the beginning of the year. Given our strong presence in the region, we are impacted by the serious economic crisis, compounded by an intensifying competitive environment as manufacturers react to lower consumer demand and excess production capacity. As a result, we have experienced a decline in margins in Europe and expect this pressure to continue for the foreseeable future. Ford Asia Pacific Africa continues to invest and pay for future growth, while not yet fully realizing the associated revenue of new products and facilities. While our volume is up in the region, our investment and growth costs are rising faster for now.”

Ford does expect that the full 2012 will be solidly profitable with positive operating cash flow from auto operations but this news does not exactly ring of solid growth in many of the key growth markets.  That coincides with other negative growth and slowing growth we have been reading about.

Ford shares are down almost 3% so far on the news in the after-hours reaction to $9.79.

JON C. OGG