The economic turmoil, lack of consumer confidence and howls for "More austerity!" in Europe have delivered a UFC-like beating to every automaker's books. And with some analysts still wondering if the current euro zone will even survive, it is obvious that it won't be over soon. But is that a reason for both General Motors and Ford to stop doing business on the continent, as Automotive News Editor-in-Chief for Europe Luca Ciferri has written?

The quick summary of Ciferri's reasons for suggesting GM and Ford pull out is that "Europe is the biggest trouble spot in GM's and Ford's global empires and could prevent both from sustaining their current success." Both are losing money there, are likely to lose money for a while, and have other profitable ventures they could focus on in China and a resurgent U.S. – and at least one analyst agrees with the suggestion.

Spefically, GM, via its Opel/Vauxhall subsidiary, has lost more than $15 billion in Europe over the past 13 years, $747 million of it in 2011 alone. Opel's current state remains so dire that GM CEO Dan Akerson calls it a "four-alarm fire" and there's another comprehensive restructuring being presented this week, following last year's comprehensive restructuring that was meant to fix the same issues. A commentary in Ward's Auto posits that perhaps short-lived GM CEO Fritz Henderson was right to want to get rid of Opel and is owed an apology. The best that GM can say about the position in Europe right now is that "it appears to be bottoming out," but Greece returning to the drachma or another large dose of pain in Spain could put the lie to that assessment. For Ciferri, the drag right now on profitable earnings elsewhere and the murky future might not be worth the trouble.

Ciferri's case for a Ford exit seems a little pressed, even though the company is estimating a half-billion dollar loss in Europe this year. Growth and margins are on the downswing, Volkswagen rules the roost and that isn't likely to change soon, and the Blue Oval owns a factory in Romania that is producing the upcoming B-Max, but because it was bought when markets were humming it is now adding to Ford's European overcapacity. Nevertheless, every automaker is dealing with losses, negative growth and slim margins, Ford has been profitable there six of the past eight years, is still number two in Europe and builds some of the most popular cars on The Continent. GM is determined to weather the storm, but in Ford's case it seems more like it would be foolish not to.

On top of all of that, having two major industrial concerns – both are in the top five in sales – tell already hard-put European governments, workers and buyers, "We're going home now, call us when things get better. Good luck," would practically ensure neither GM nor Ford would earn another euro until everyone involved was making cars in heaven.


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  • 74 Comments
      aatbloke1967
      • 2 Years Ago
      This article is sensationalist and its content mere posturising. Ford dominates the UK market - Europe's second largest - and has always been a major player in Germany (the largest). GME on the other hand performs much better in Britain than in Germany, mainly by virtue of the UK's enormous company car market. Ford, Vauxhall and Opel have all in the past featured prominently on motorsport and this captured the hears of many young people. In my opinion, a ardent return to motorsport by GME especially needs to be flaunted. Secondly, all of the European mainstreams have pulled out of the E-segment luxury car sector over the past fifteen years as the German Q-marques have encroached well into their pricing and marketing territories. This rampant march is now sorely affecting D-segment sales as well; the Mondeo is outsold by the 3-series in the UK consistently, the Laguna is no longer offered in all markets and the Insignia too is suffering. The C and D segments are bread and butter for Ford, Opel, PSA and Volkswagen who seem to be powerless to stop the wave of smaller and more affordable products heading their way from BMW, Mercedes and the likes. Flooding the market via Ford Direct and GME's Network Q has helped stave the issue, and state of the art engine technology to rival Fiat with the likes of Ford's 1 litre EcoBoost and 1.6 EcoNetic are keeping their heads above water. But Ford and Opel need to return to the mindset of days gone by when they had cars which captured the public's imagination, such as the Fiesta XR2, Escort RS Cosworth, Manta 400 and Nova GTE. These cars stood aside and above the competition, instead of drowning in anonymity.
        Queryanalyzer
        • 2 Years Ago
        @aatbloke1967
        Exactly.. "sensationalism", that is all this is. Ford actually competes, and wins, in the EU. Unlike here in the US where people buy Ford because its patriotic thing to do, but their product lineup is getting better so that changing now. May be I should write an op-ed about how its best for GM and Ford to pull out of US and just play in the international market.
        vrmchris
        • 2 Years Ago
        @aatbloke1967
        hello to all, aatbloke1967, i agree 100 percent with what you just said. i also believe there are things that ford and opel need to do. (1) the ceo position for ford of europe and opel/vauxhall needs to be a destination in an of itself. not merely a stepping stone for anyone who is on the fasttrack to be ceo of ford or gm. (2) marketing. it needs to be more consistent. not change everytime a new ceo or marketing chief comes in. (3) motorsport. and i agree opel in particular needs it. the chevrolet brand imho did not need to be in wtcc. i understand it from gm's point of view, but it undermined opel in europe and elsewhere. (4) halo car. ford could have one if the mustang in 2015 is engineered for everyone who would want one through the sales/concession network. as much as i like the opel astra gtc/opc, that is the halo car for opel? get the platform of the holden commodore and do a real flagship/halo car for opel. (5) limited production car. not a badge engineered car. you mentioned some of the more desirable cars that ford/opel have produced. both of them need to do that again and stay doing that. again aatbloke1967, agree 100 percent. regards, vrmchris
      HunterB
      • 2 Years Ago
      GM maybe. Ford no! From living in Europe for 2 years Ford seems to do pretty good. You can spot them all over. GM on the other hand, not so much.
      smiddlehurst
      • 2 Years Ago
      Except of course that if Ford and GM pulled out, that's it. Customers wouldn't forget that they pulled out, especially those who currently own one of their cars. European manufacturers would fill the gap (quality on French and Italian cars, while still not perfect, is determinately much improved these days) and there'd be no way back in, at least not without a huge investment in marketing and facilities plus the cost of trying to mend bridges with dealers. The thing is though, and I appreciate this is a UK perspective, why would they need to bail? Best selling cars in the UK last year: 1) Ford Fiesta. 2) Ford Focus. 3) Vauxhall Corsa. 5) Vauxhall Astra. 6) Vauxhall Insignia. That's five of the top 6 cars from Ford or GM with only the VW Golf getting between them. If they can't make money off that I'd suggest the problem is elsewhere. Either with the infrastructure (including manufacturing facilities), support costs (i.e. warranty claims) or maybe in the other models in the range. Ford have 10 models, Vauxhall 9 and that's before you get into bodyshell variants. Surely there's fat in there that can be trimmed? Ultimately this is just a storm the big manufacturers have to weather as best they can IMO. While sales are low the popularity of Ford and GM surely shows that it's worth hanging on for an economic recovery, at least in the UK?
        Colin
        • 2 Years Ago
        @smiddlehurst
        Those sales are mostly fleet and Ford and GM make practicaly nothing from them.
          Synthono
          • 2 Years Ago
          @Colin
          Then they have to adjust their fleet pricing, not pull out altogether.
      BLS
      • 2 Years Ago
      It doesn't make sense to leave Europe now and try to come back when things are better. The brands will have to rebuild from the ground up. They might as well stay for the marketing alone and try not to lose money on lower volume. How is that Alfa Romeo reintroduction to the US going?
      Steve
      • 2 Years Ago
      Of course they need to stay. Europe will come back after this disaster and the all car makers will do well again. You just don't pull out when times are tough. Staying in Europe makes sense and everyone will benefit from it, once the Euro bounces back. It will take some time though.
      Sgt Beavis
      • 2 Years Ago
      I can see a decent argument for GM to withdraw but this guy is just moronic to suggest that Ford should pull out. I guess Ford and GM should have abandoned the US market years ago...
      cbamft
      • 2 Years Ago
      "Spefically" is my new favorite word.
      throwback
      • 2 Years Ago
      I don't think either one should leave Europe, Ford especially. I do think GM should still try to sell Opel and concentrate on building the Chevy brand. GM has got to stop competing against it self. Europe will eventually rebound but their is just too much capacity and Europena countries will never allow their respective car companies to declare bankruptcy and shed jobs and plants. It will be bad for a while.
      Pandamasque
      • 2 Years Ago
      Whoever came up with the title is either trolling or should have his head checked. Yeah there's the crisis and everything, but I'm looking out of the window and there's a brand spanking new Focus Wagon (looks great in bright red by the way). There are a lot more Fords on the roads than Volkswagens here (Ukraine, population ~40 mil). Meanwhile the Korean-bred Chevrolets are the real "people's car" here, they are absolutely all over the place.
      • 2 Years Ago
      [blocked]
      GelatoA
      • 2 Years Ago
      Of course not! Give in to Kia and Hyundai? I don't understand how can the Asians in a few years make profits with their unknown brands, and big established brands with huge experience are retreating without giving a fight. It's a recipe for unemployment and poverty.
      breakfastburrito
      • 2 Years Ago
      bring your Euro cars to the U.S.!
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