Ford Motor Company (F)
October 25, 2012 9:00 am ET
George Sharp - Director of Investor Relations
Alan R. Mulally - Chief Executive Officer, President, Executive Director and Member of Finance Committee
Stephen T. Odell - Chairman and Chief Executive Officer
Robert L. Shanks - Chief Financial Officer, Executive Vice President, Chief Accounting Officer and Chairman of Global Risk Management Committee
John Murphy - BofA Merrill Lynch, Research Division
Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division
Brian Arthur Johnson - Barclays Capital, Research Division
Colin Langan - UBS Investment Bank, Research Division
Adam Jonas - Morgan Stanley, Research Division
Michael P. Ward - Sterne Agee & Leach Inc., Research Division
Rod Lache - Deutsche Bank AG, Research Division
Patrick Archambault - Goldman Sachs Group Inc., Research Division
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Thank you, Anne, and good morning, ladies and gentlemen. Welcome to all of you who are joining us today either by phone or webcast. On behalf of the entire Ford management team, I'd like to thank you for spending time with us this morning.
Now today's presentation will focus on the actions we are taking to accelerate the transformation of our European operations. Next Tuesday, we'll be holding our normal conference call on third quarter earnings, so your questions related to earnings can be handled at that time. Presenting today are Alan Mulally, President and CEO of Ford Motor Company; Stephen Odell, Chairman and CEO of Ford Europe; and Bob Shanks, Chief Financial Officer. Also in attendance are Stuart Rowley, Corporate Controller; and Neil Schloss, Corporate Treasurer.
Before we begin, I'd like to cover a few items. Copies of this morning's press release and the presentation slides that we'll be using have been posted on our investor and media website for your reference. Finally, today's presentation includes some forward-looking statements about our expectations for Ford's future performance. Of course, actual results could differ materially from those suggested by our comments today. The most significant factors that could affect future results are summarized at the end of this presentation. These risk factors and other key information are detailed in our SEC filings.
With that, I'd now like to turn the presentation over to Ford's President and CEO, Alan Mulally.
Alan R. Mulally
Thank you, George, and good morning to everyone. And to those listening from Europe, good afternoon. We are pleased to have the opportunity to review the plans we announced yesterday and earlier today to achieve profitable growth for our operations in Europe. Let's start by turning to Slide 2, please.
This, of course, is our ONE Ford plan. It has been unchanged for many years. It is the plan that is transforming our business in North America and it is the plan that is driving our growth in Asia Pacific and Africa and South America. And it is the same plan that we are using to address the European crisis affecting our business.
We are moving decisively to mass production to demand; accelerating the development of new products and technologies that will expand our portfolio, giving us a product lineup of best-in-class cars, utilities and trucks that is among the freshest and most advanced in Europe; taking actions to strengthen our Ford brand; improving the efficiency of our operations; taking advantage of opportunities to grow our business; and leveraging the global assets of the Ford Motor Company worldwide.
Stephen Odell, Chairman and CEO of Ford Europe, will now take us through the actions we are announcing today. Stephen?
Stephen T. Odell
Thank you, Alan. Before talking about the actions we're announcing today, it's important first to understand and recognize the importance of Europe to the global automotive industry and to Ford.
Within the global automotive industry, Europe is the second-largest automotive region in the world, behind Asia Pacific Africa. It is also home to growing markets, such as Russia, Turkey and Eastern Europe. For Ford, Europe is an important part of the company representing slightly more than 1/4 of our Automotive revenue and vehicle volume.
Our brand is well regarded and is second in the region in terms of sales. The products we sell are, for the most part, from our global ONE Ford product portfolio. We have a history of more than 100 years serving customers in Europe, supported by substantial investments we and our dealers have made across the continent. Europe is also an important center of engineering, research and development, supporting all regions of the company. We also have 3 large and successful joint ventures in Europe. And as at the end of 2011, we had 47,000 employees. We progressively restructured our business since the late 1990s, resulting in a cumulative profit over the 2004 through '11 period. But we incurred a loss through the first half of this year as the business environment significantly deteriorated.
As outlined here on Slide 4, the business environment in Europe is very difficult due to structural issues associated with the sovereign debt crisis that likely will continue for a considerable period of time and will take time to resolve. As a result, we expect continuing economic weakness in the region. Consistent with that, we continue to project an industry volume of about 14 million units this year, which would be the weakest industry since 1994. For 2013, we expect flat to lower industry volume. By mid-decade, we expect the industry to grow only modestly with volume increasing to about 15 million units, well below the peak industry of 2007 of 18 million units. On the other hand, we do project stronger growth in markets such as Russia and Turkey, which are not included in the 19 markets we call Europe for the purposes of industry volume and market share.