Mazda's Booth to Head Ford Europe

Japan's Mazda Motor Corp said today its president had stepped down to take charge of Ford's troubled European arm, leaving the car maker in the hands of a Japanese veteran for the first time in seven years.

The announcement came as a surprise since Lewis Booth had been expected to stay for at least two years after taking charge of Japan's fifth-biggest auto maker, owned one-third by Ford Motor Co, in June 2002.

"I recognise this is unexpected," Booth, who headed Ford's Asia-Pacific and African division before joining Mazda, told a news conference. "Unfortunately 10 days ago the president of Ford Europe unexpectedly resigned. The future of Ford Europe is very important not just for Ford but for Mazda as well."

Booth has a tough job ahead of him.

In the three months to end-June, Ford's European operations posted a pre-tax loss of $525 million, which the company blamed on a drop in car demand and fierce price competition.

The loss had prompted intense speculation about management changes and was followed a month later by the sudden resignation of Martin Leach as president and chief operating officer. Leach will be working as chief executive of Fiat's car division.

"There are structural issues on both the cost side and the product side which need to be addressed at Ford Europe," said Michael Raab, an auto analyst at Sal Oppenheim in Frankfurt.

Analysts say it will be tough for Ford Europe to fight back in the current environment of falling demand, pricing pressure and overcapacity. The unit had already lost market share in the late 1990s as the appeal of its products faded and the unit missed out on the start of Europe's diesel boom.

In contrast, Mazda has been zooming past its rivals in Europe thanks to popular new models such as the Mazda6/Atenza sedan. Mazda's sales in Europe rose 34 percent in the three months to June, helping overall revenue grow 10 percent.