Just as things were looking up in Europe.
In a recent interview with Bloomberg‘s Matt Miller, Ford Motor Company CEO Mark Fields said that the UK’s vote last month to exit the European Union cost the automaker’s European division some $60 million during the second quarter of 2016. Immediately after the so-called “Brexit” vote, the value of the British pound plunged by more than 10 percent – the currency’s worst day ever recorded.
Last year, Ford’s European division posted its first profit in several years – an indication that its carefully-planned turnaround in the region was starting to pay off.
“To put it into perspective, the UK is our largest business in Europe. It represents 30 percent of our sales [there],” Mark Fields said. “So this year… we’re not hedged against the balance sheet, so the lower pound hit our profits for about 60-million dollars.” He went on to suggest that continued losses were likely inevitable, and that they could total $200 million by the end of 2016.
What’s more, losses could continue into next year or beyond, depending on how (and when) the UK renegotiates its trade relationship with the European Union. On that subject, Mark Fields told Bloomberg: “We’re looking at a variety of different scenarios. First off, [the UK has] to start the process, and that’s probably not going to start until the end of this year, and they have about two years to do it. So it’s not only trying to put scenarios together around what we think the trading relationship will be, but what timeframe.”
The Ford CEO continued: “As it stands right now, we’re not making any changes to our operating structure that we’ve already implemented, but we will always stay very focused on making sure that we maintain competitiveness in the region and put ourselves on a path to sustained profitability.”
You can watch a clip from Bloomberg‘s interview with CEO Mark Fields on the news outlet’s website.