The move follows a $525 million pretax loss for the second quarter at Ford of Europe.
David Thursfield, president of International Operations, will oversee Ford of Europe in the interim, the company said in a statement.
Thursfield, based in Dearborn, Mich., already was spending most of his time in Ford's European headquarters in Cologne, Germany. He also is chairman of Ford of Europe.
Sources said earlier that the company is considering naming an executive to oversee both Ford of Europe and Premier Automotive Group.
The company's top executives want the two business units to cooperate more closely, particularly in purchasing and parts sharing. Premier, under Chairman Mark Fields, consists of Ford's Europe-based premium brands, Jaguar, Land Rover and Aston Martin in England and Sweden's Volvo.
If the reorganization is approved, a European chief would probably be named in September or October.
Company officials blamed the Ford of Europe loss on lower net pricing, an unfavorable product mix, lower industry volume and dealer stock reductions.
Ford has struggled to keep up as competitors have offered large discounts in Europe. Key products such as the Mondeo, which is positioned in a declining segment, have not lived up to sales expectations.
Other volume manufacturers, including Europe's two biggest carmakers Volkswagen and PSA Peugeot Citroen, also are suffering from the tough conditions and from a stronger euro against the dollar and British pound.
Last week Ford Europe manufacturing chief John Fleming stopped short of pledging a return to profit this year but said the group's three percent return on sales target for around the middle of the decade was achievable.
A Ford Europe spokesman said those statements were still valid.
"Martin Leach made the decision to leave himself and this does not change anything regarding our goals or our strategy," said the spokesman, who declined to say when a permanent successor would be chosen.
Reuters contributed to this report