Ford and GM Commit to Europe Despite Turmoil

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Despite the growing stagnation of the European auto market, worries that it won’t improve anytime soon, and huge financial tolls that slumping sales are taking on just about every automaker selling on the continent, General Motors and Ford have surprised some industry followers in recent days by re-committing to the future of their brands in Europe.

Ford CEO Alan Mulally hosted a “more than a tagline” Go Further event in Amsterdam last week to unveil their new lineup to its European dealers. And Michael Lohscheller, new chief financial officer of GM’s Opel unit, told Reuters that GM already has figured out where it wants to take the brand over the next 10 years.[more]

Many securities analysts and close GM followers have been urging the automaker to pull altogether out of Europe, where Opel has been GM’s traditional brand and where it’s increasingly selling Chevrolets as well.

Even a costly sale of Opel is preferable to either keeping or closing the unit, said Adam Jonas, Morgan Stanley’s U.S. auto analyst, estimating that Opel will burn through another $12 billion in cash over the next decade, according to Automotive News Europe. Certainly, it might be easy enough for either company to call it a day in Europe, given the headwinds — and much brighter opportunities in the developing world.

Undaunted, Opel’s new finance chief commented that, instead, GM has hatched a very different sort of plan for the next 10 years in Europe: introducing a fleet of new vehicles and powertrains, including some in new segments to the brand such as small SUVs and minicars.

“Opel is the pillar of GM in Europe,” Lohscheller said. “A global company can only be successful if it also has a strong presence in Europe.”

Meanwhile, Mulally and key lieutenants in Amsterdam made it clear that they feel the same way on behalf of Ford when they announced a major product acceleration for the company there. New products will include large cars, SUVs and commercial vans. The company plans to save on development and manufacturing costs by utilizing some of its global mechanical platforms on whcih to base the new vehicles.

Ford already is planning to sell a next-generation Fiesta in Europe this year and the new Mondeo, a twin of the upcoming Fusion going on sale in the U.S. later this year. And Ford said it even plans to sell its iconic Mustang in Europe.

We can choose to see obstacles or we can treat these challenges as gems,” Ford of Europe CEO Stephen Odell said, according to Forbes.com, “and use these opportunities to turn adversity into real success.”

Lately for Ford and GM in Europe, there’s been plenty of adversity. Success? Not so much, yet. But they seem determined to stick it out.

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