Ford (F) shares stumbled Friday after the automaker warned losses in its international division could be three times greater than the $190 million first-quarter loss.
Pre-tax losses could hit $570 million in the just-concluded second quarter, the company disclosed in an SEC filing, released after CFO Robert Shanks told The NY Times "overall company profits will be substantially lower" because of weakness in its international division.
When I sat down with Ford CEO Alan Mulally last week, he expressed great concern about Europe but gave no indication that the company was facing bigger-than-expected losses.
"We haven't backed off one bit on our investment in new vehicles" for Europe, Mulally said. While the European market "is really deteriorating," he noted overall auto sales are still around 14 million units.
"It's a very important market for us, we have a great product line and so we're going to stay laser-focused on serving those customers, even during the toughest of times," he says.
Despite speculation from some analysts, Ford would not say definitively if it will close any of its European plants.
"We are not going to provide any specifics about our plan for Europe, including capacity," according to Ford CFO Bob Shanks. "It is too soon to say what we are going to do. When you think about what it takes to sustain the business, our philosophy is to align capacity with demand."
In the accompanying video, taped June 22 at Ford's world headquarters in Dearborn, MI, Mulally also discussed the company's prospects in Asia.
"We're very well positioned to serve the Asia customers, especially India and China," he says.
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