Automotive News Europe - April 2020 - 10
AUTOMOTIVE NEWS EUROPE
Reset & redesign
Ford exec takes big steps on path to making European arm sustainably profitable
ord's intensified efforts to turn
around its money-losing European
division including the closure or selloff of six plants and the elimination of
more than 12,000 jobs. The cost-cutting
push appears to be working: Ford of Europe posted a small profit of $21 million
(18.7 million euros) in the final quarter
of 2019. Leading the reorganization is
Stuart Rowley, who started last April
after serving as chief operating officer
of Ford's North American arm. Prior to
that he was chief financial officer at Ford
of Europe as well as Volvo. He spoke to
Automotive News Europe Correspondent
Nick Gibbs about the challenges ahead.
What does a healthy automaker look
like in Europe right now? How close is
Ford to achieving this?
A healthy automaker has strong products that appeal to its customers. With
strong products come good returns. Our
objective is a 6 percent margin. We are
not there. We were effectively a breakeven business last year, which was a significant improvement on 2018. So it's a
step in the right direction. But if you peel
that business back, you will find some
very strong businesses underneath it.
Could you give an example?
Top of that list is commercial vehicles.
We have appointed a general manager,
Hans Schep, and he has P&L [profit and
loss] accountability. We are reducing our
personnel levels by about 20 percent a
year, but at the same time we have more
than doubled the resources dedicated to
How far along are you with staff cuts?
Our Reset and Redesign program for 201920 includes a staff reduction of about
10,000 people across Western Europe plus
2,500 in Russia by the end of this year. By
the end of January, we were more than
halfway through that. The Russian piece is
done. More than half of the cuts are in Germany. It's white collar, it's blue collar, it's
agency employees. It's at all levels of the
organization. Executive levels have been
taken down by almost 40 percent.
Meet the boss
❚ NAME: Stuart Rowley
❚ TITLE: Ford of Europe
❚ AGE: 52
❚ MAIN CHALLENGE:
Electrifying the U.S. automaker's European lineup.
What CO2 level must you reach to
avoid EU fines and which models are
you relying on most to get you there?
About 98 grams per kilometer is the target for this year for passenger cars. We
think of it like a seesaw. We discontinued
a number of vehicles that had relatively
poor CO2, such as the C-Max [minivan]
and Ka+ [minicar]. Then we launched the
Kuga and Puma SUVs. The Kuga plug-in
hybrid is important because we get supercredits for that. Other important products on the right side of the seesaw are
the Mustang Mach E, the Explorer [large
SUV] plug-in hybrid and the Transit Custom Tourneo plug-in hybrid [van].
The Puma small SUV is going to be
a significant seller, but it's on the
wrong side of that seesaw, isn't it?
Only marginally. The order take on the
mild hybrid version is extremely high.
And, of course, we will put mild hybrid
in the Fiesta and Focus. We are seeing
strong demand for electrified products.
The Mustang Mach E [electric SUV] will
have a relatively small impact this year
but in 2021 we have a full year of sales. If
anything would keep me awake at night,
it would be wishing we had more supply.
How many of the Mach E's projected
50,000 annual global sales do you
need to sell in Europe to reach your
2021 EU emissions target?
We will take a good proportion of those. I'm
not going to quote sales numbers. I actually think we are going to have more demand
globally, so it's going to be a tussle. It's not
a compliance play. It's a great product and
it's well positioned in the market. It's going
to be profitable for us in Europe. The challenge is the charging infrastructure.
Will you have to pay EU fines?
Something will have to go wrong for us
to pay fines.
The Kuga is currently Britain's cheapest plug-in hybrid in terms of lease
rates, suggesting it's being discounted. Are you going to take a hit on that
car in terms of profitability?
We are positioning the plug-in hybrid to
assist our compliance because we won't
Automotive News Europe - April 2020
Table of Contents for the Digital Edition of Automotive News Europe - April 2020
Automotive News Europe - April 2020 - Intro
Automotive News Europe - April 2020 - Cover1
Automotive News Europe - April 2020 - Cover2
Automotive News Europe - April 2020 - 3
Automotive News Europe - April 2020 - Contents
Automotive News Europe - April 2020 - 5
Automotive News Europe - April 2020 - 6
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Automotive News Europe - April 2020 - Cover3
Automotive News Europe - April 2020 - Cover4