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Ford already taking a hit from Brexit

Ford Europe has already incurred a loss of $US600 million ($A778.56) as a result of Britain's decision to leave the European Union.

The loss, made in 2017, was revealed by Ford Germany chief Gunnar Herrmann in an interview with the German business magazine Handelsblatt, published on Tuesday.

The company also expects the losses to continue in 2018 as a result of the "hefty minus from the weak pound."

Sterling plummeted in value after the British public's referendum decision to leave the EU in June 2016. Uncertainty about Britain's future relationship with the EU has maintained pressure on the pound, leading to losses for companies like Ford that convert earnings in pounds into dollars.

Herrmann is most concerned by a potential "hard Brexit," which would see Britain leave the single EU market and customs union entirely.

"For us that is so problematic because we have a high level of exchange between our production in Britain and our plants on the continent," Herrmann said.

All of Ford's diesel engines are built in Britain, then installed into cars in the German cities of Cologne and Saarlouis, before those with right-hand drive are sent back to Britain. This process could result in "an incredibly high tariff burden," Herrmann said.

Ford Europe achieved an operating profit of $US234 million on sales of $US29.7 billion in 2017.

Despite the Brexit headache, Herrmann forecast that the European arm of the US carmaking giant would remain profitable for the foreseeable future. "I would not see any reason why we couldn't be profitable until 2022," Herrmann said.

Austrlaian Associated PressBack to Breaking News

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