Ford Motor Co Earnings Call Nuggets: European Loss, Inventory Reductions
Loss from European Activity
Massimo Vecchio – Mediobanca Securities asked: I’d like to focus on the European issue as you described starting from Slide 4 where you gave a indication of the loss of the European activity. Can you share with us what was that figure in 2010? Was it much different than what was just shown?
Sergio Marchionne – CEO responded: It was lower than it was now, but the number was still negative. I won’t give you the exact number. I think it’s no use trying to revisit the past. I am not going to talk to you about 1997 volumes either.
The reality is that I am starting my life with 2011 bench. We need to fix that bench. I can’t go back and reconstruct 2010. I can tell you that the pricing environment in Europe in 2010 was drastically different than it is today.
Martino De Ambroggi – Equita SIM SpA asked: This is the last question on Ferrari-Maserati. If you look at your performance so far, last year you were able to generate EUR 100 million of excess performance in terms of trading profit versus the guidance. Is this the pace also going forward for the Maserati and Ferrari division?
Sergio Marchionne – CEO: No, Maserati is going through a transition year as it renews its private portfolio. We will not see the full potential on Maserati until the four door gets launched and the (coupe) comes into the market at the end of 2013.
I think that 2012 is not going to be the exceptional year for Maserati. Ferrari will continue to do well. Certainly, the order books continue to be full.
I have no cause of concern for the performance of Ferrari. I don’t expect it to be significantly larger but the numbers that you are using compares to 2012.
Stuart Pearson – Morgan Stanley asked: Your inventory was relatively flat as someone pointed out in an earlier question. How much do you think you might need to reduce that during the first quarter?
Richard Palmer – CFO responded: We are running at 2.1 month of inventory. As we said, we don’t want the number to get higher. I don’t think think there is going to be a serious adjustment unless the first quarter sales in the European zone are seriously impacted by the macroeconomic scenario.