FORD'S European profits more than doubled in the latest quarter while its US business racked up massive losses as the American love affair with the pickup truck ground to a halt.
Unveiling a group loss of $8.7 billion (£4.4bn) on the back of hefty write-downs, Ford said the US economy was likely to remain in the mire for the next two years.
The loss, which was worse than Wall Street's expectations, included impairment char
ges totalling more than $7bn, primarily a result of the shift away from gas-guzzling pickups and sports utility vehicles (SUVs).
Ford is undertaking a sweeping overhaul of its North American operations, including converting three plants from building pickups to making cars.
It plans to bring six European models – including the Transit Connect small van, Focus and Fiesta – to North America by the end of 2012.
The company said it would retool its "truck" plant in suburban Detroit, shifting its products from large SUVs to make vehicles based on the European Focus platform by 2010.
Ford reported a pre-tax loss of $1.3bn in North America, widening from a $270 million loss a year earlier.
Ford's sales in the US were 14 per cent lower year-on-year in the first half of the year, compared with a 10 per cent market decline.
However, the group posted increased pre-tax profits in Europe, South America and its Asia Pacific Africa region. In Europe, profits jumped 112 per cent to $582m.
At Ford's Volvo car business, second-quarter losses amounted to $120m, compared with $91m a year earlier.
Earlier this year, Indian conglomerate Tata bought the iconic Jaguar and Land Rover brands from Ford for about £1.7 billion. Shortly afterwards, it announced details of a £700m investment in the two famous marques.
Ford chief executive Alan Mulally said: "We continue to take decisive action in response to the rapidly changing business environment and remain absolutely committed to … our business transformation plan.
"We are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America."
The firm has abandoned a long-standing goal of returning to profitability in 2009 and delayed the launch of a redesigned top-selling F-150 pickup truck by two months to sell existing stock.
Chief financial officer Don Leclair said he was confident Ford had the cash needed to ride out the US downturn.
"We're confident that we have enough liquidity to get through," he added.
• French car manufacturer Renault is talking to unions about a voluntary redundancy plan in Europe that is likely to lead to 5,000 job cuts by 2010.
Renault said it was scaling back its production targets because of weak sales in the UK, Spain and Italy.
The full article contains 482 words and appears in The Scotsman newspaper.
