“We think this is a situation that we will have to deal with for the foreseeable future.”-Bob Shanks, Ford CFO

“We have overcapacity now in Europe. It isn’t going to come back fast and we aren’t going to be saved by volume.”-Alan Mulally, Ford CEO

02 August 2012, Ford and General Motors (GM) reporting falling profits despite earlier reports of increased sales.

GM reporting a drop in profits of 41% compared to the same time last year.  Ford reporting a 57% drop!  Both blame crashing sales in the European Union. GM lost $361 million USD in Europe, Ford lost $404 million!

GM’s biggest European brand, Opel, has been losing money big time.  German newspapers are reporting major changes in the works, such as reducing pay for employees, layoffs and even ending some production in the United States, shifting that production to Europe then shipping the cars to the U.S. for sale (of course that would mean layoffs for U.S. workers).

Chrysler, now controlled by Italy’s Fiat, was the only one to see an increase in profits. However, Fiat is hoping to use Chrysler to offset Fiat losses in Europe.

Ford also had profit losses in South America and Asia, which is worrisome since those are the two big vehicle sales markets right now. When asked if factory closings and layoffs were in the works, Ford’s CEO said cuts to “all areas of the business” were being considered.