GENEVA -- In one of those uncanny coincidences, U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov met at the Hotel President Wilson here Monday to discuss the ceasefire in the Ukraine.
A few hours later, Ford Motor Co. held its pre-Geneva show reception at the same hotel. Jim Farley, newly installed as head of Ford of Europe, vowed that the loss-making unit is “going to make progress in spite of the headwinds.”
I was able to grab a few minutes of conversation with Farley afterwards, and it was apparent that no one would be happier for the tensions between Russia and the West to be resolved. Clearly the strongest headwind pushing Ford away from its earlier goal of European profitability in 2015 is the severely declining Russian market.
Farley said that inflation in Russia, resulting from Western sanctions, is forcing automakers to increase prices beyond the ability of consumers to pay. Even with a scrappage program last year, he said, the market dropped badly and is likely to do so again this year.
It was a sobering interlude in an otherwise upbeat night, when Ford displayed its performance Focus RS and the superlative Ford GT shown in Detroit. Farley is keen on cars like these, as well as the upscale Vignale trim line in Europe, to keep pushing Ford above the mainstream to what Ford calls “mainstream premium.”
And Mustang-lover Farley mentioned that 500,000 European consumers have configured Mustangs online in advance of the car’s launch here.
But the Russian thing is a blow -- a collapse in a market where Ford had seen major growth potential. Farley can only hope that the Kerry-Lavrov talks were fruitful.