Ford, GM Europe progress stymied by Russia

Neil Winton
Special to The Detroit News

Geneva — General Motors Europe and Ford Europe should be taking credit at the Geneva International Motor Show for turning horrendous losses into at least the possibility of profits.

Unfortunately, they hadn’t bargained for trouble in Russia.

GM’s European subsidiaries unveiled their new small car, the Karl, which will be sold as the Opel Karl and Vauxhall Viva. (Opel sells GM cars under its brand in all of Europe except Britain, which labels the cars Vauxhalls.)

Karl-Thomas Neumann, president of GM Europe, has high hopes for sales of the Karl/Viva, but overall financial performance is being held back by Russia.

Neumann said Russia’s ailing economy in general and the weakening of the ruble in particular was causing big problems.

Last year, GM Europe’s losses widened to $1.37 billion from $899 million in 2013. In December, Neumann warned that the target of returning to the black in 2016 was under threat. Last month, GM Chief Financial Officer Chuck Stevens reiterated that this was still the target. On Tuesday, Neumann reaffirmed that despite problems in Russia, the target remained.

“We still are hoping to break-even by 2016,” Neumann told a media briefing.

GM has decided to cut output at its St. Petersburg, Russia, factory, by idling it for eight weeks starting in late March, and might extend this. GM had already cut production to one shift.

Ford Europe, meanwhile, launched its latest European version of the Mustang and Edge.

Ford Europe has made big losses in Europe, too. Last year it lost $1.1 billion, an improvement on 2013’s $1.4 billion. Ford had estimated losses of $250 million in 2015, but late in January backed off from this forecast, saying it would be less than $1 billion, but bigger than previously thought. Ford Europe is unwilling to speculate about 2016, although like GM it had been expected to at least break-even. Then came Russia.

“We’ve made no forecast yet for 2016,” said Barb Samardzich, vice-president and chief operating officer Ford Europe in an interview.

Last year Ford lost $348 million in Russia.

Fiat Chrysler was keeping a low profile, until CEO Sergio Marchionne teased the media saying he would be interested in merging with a company other than Volkswagen, but declined to say which one.

Volkswagen, Europe’s biggest selling car maker, paraded its new Passat sedan, on Monday awarded European Car of the Year, 2015.

Meanwhile at the show, Ferrari will be attracting the crowds with its spectacular new 488 GTB, while a new McLaren and an Aston Martin concept will compete for attention.

On the affordable front, there were new small SUVs — the Renault Kadjur, Honda HR-V and Mazda CR-3. New technology is taking a bit of a back seat as electric car sales in Europe look like stalling, but Audi’s new R8 supercar boasts an electric version claimed to go 280 miles on a charge, which can also be refilled much quicker than other battery cars — less than two hours.

Weirdest newcomer? A convertible version of the Land Rover Evoque SUV.

The Geneva Car Show is open to the public March 5 through March 15.