Ford second quarter earnings drop 57 percent

July 26, 2012 12:00 AM

American automaker Ford has announced its second quarter earnings are down 57 percent compared to the previous year, though that's largely because of heavy losses in Europe and despite big gains in the United States.

In North America, Ford's profits actually rose by 5.3 percent compared to the same time in 2011, but a major drop-off in European sales hurt the brand significantly. Europe is still in the throes of a debt crisis, and automakers around the world are feeling the sting as car sales plummet.

"Europe is a significant challenge," Ford CEO Alan Mullally told The Detroit Free Press. "We have made money there six out of the last eight years, but they’re seeing a very significant deterioration in the economy and the industry."

Ford warned investors that when all is said and done, the company may lose more than $1 billion in its European operations this year. Many analysts are calling on Ford to close one of its European factories in order to meet the reduced demand overseas.

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