Ford launches B-Max subcompact

COLLEEN BARRY FRANK JORDANS Associated Press Published:

GENEVA (AP) -- Ford launched its new B-Max family car at the Geneva Motor Show on Tuesday, amid concerns that faltering demand in Europe may require mass market automakers to consider further plant closures.

The subcompact B-Max, to be sold only in Europe, is recognizable for its missing pillar between the front and rear doors and is aimed squarely at a demographic squeezed by government austerity measures.

It features Ford's EcoBoost fuel-saving technology, another nod to cost-conscious consumers looking to counter rising gas prices.

Ford's chief executive Alan Mulally insisted the company still considers Europe an important market, despite losing money there last year.

"Europe, even now with the slowdown, we're at nearly 14 million units," he told The Associated Press at a pre-show event late Monday. By comparison, Ford's estimate for North America is only slightly higher, with 14.5 million units.

But Mulally said that to compete, automakers need to aggressively meet consumer demand. At the moment there is a strong appetite for small, sleek and sporty vehicles in Europe, he said. "Remember when smaller cars used to be cheap and cheerful? Now the consumers want the finest quality, the finest fuel efficiency, safety and design."

Meanwhile, Ford Europe's CEO told reporters Tuesday that European policymakers should stop getting in the way of plant closures as the industry seeks to balance supply with shrinking demand.

"I believe policymakers can stop making statements that they understand capacity should be taken out -- but not in my country," Odell said.

He also criticized the European free trade agreement with Korea as being lopsided -- resulting in seven times more cars arriving from South Korea than heading there from Europe. He hopes the same thing won't happen with an Indian accord being negotiated.

Idle production lines in Europe are cutting profits as automakers face a contracting market. Odell said Ford plants are operating just above 90 percent thanks to earlier plant closures, and emphasized that Ford Europe has been profitable for six of the last eight years despite a difficult economic environment.

More recently, Ford Europe has dropped a Belgian plant to four days a week and reducing the temporary work force at plants in Germany and Britain.

Ford made difficult decisions on plants during the 2008 and 2009 crisis -- something that didn't happen Europe-wide "for a number of national reasons," Ford CFO Lewis Booth told The Associated Press.

Ford will focus on cost containment to return to profitability until demand is restored, but he declined to speculate on possible measures. Booth said Ford Europe could lose $500 to $600 million dollars this year, after recording losses of $190 million in the last quarter of 2011.

"The European consumer is nervous about spending money because he doesn't know what the future holds," Booth said.