Ford posts $267 million after-tax loss

[Wretched]

Ford has joined Holden in reporting significant losses for 2013.

The manufacturer’s annual financial report shows after-tax losses of $267 million, driven largely by a $242 million write-down of its local manufacturing facilities.

Its 2013 operational losses were listed at $25 million, which came despite $72 million in government support.

Ford announced on May 2013 that it would stop building cars locally in 2016, a decision that was followed by the collapse of the Australian car industry as Holden and Toyota followed suit.

The brand will shed 1200 jobs by 2016 in a process expected to cost $200 to $250 million in redundancy provisions.

Its 2013 results follow losses of $290 million and $141 million in 2011 and 2012, but Ford has hope for the future.

Ford Australia president and chief executive, Bob Graziano, says more lucrative imported models now form 80 per cent of its sales.

“Our business is strengthening based on the retail customer response to our new products such as Ranger, Focus and Kuga,” Graziano says.

“Serving individual customers with world-class vehicles is driving the momentum of the transformation plan we announced a year ago.”

Ford says it will have the largest automotive workforce in Australia once Toyota and Holden stop building cars.

Its Melbourne-based facilities serve as an Asia-Pacific research and development cars for cars such as the China-only Ford Escort, giving Australia a significant role to pay in the creation of new cars.

The role also brings in significant cash for Ford Australia, which posted $312.9 million in engineering revenue that helped offset its losses.

Ford’s local arm has also courted profitability by pursuing private sales as opposed to cut-price fleet deals.

http://www.drive.com.au/motor-news/f...513-386ms.html

[Road_Warrior]

So my take on this is, because the intent is to close the manufacturing facilities, the net worth of the premises is far less as an empty premises that it would be as a “going concern” (i.e. a functioning assembly plant) and therefore the market/real value of the asset must be lowered, which is reflected overall in Ford’s Annual Report for 13/14 but it still remains as a paper loss, not an actual cash loss. If there was an actual cash loss to be realised on the value of assets, it would not be realised until the said asset is actually sold or repaired and even then it would be rated against a theoretical value it once had as a manufacturing operation, and that theoretical value can be influenced by so many things it probably wouldn’t be worthwhile to even do the comparison. So that explains the “one time impairment” thing, in my mind anyway.

[EgoFG]

So

in 12 years H has taken 1.8billion taxpayer money, resulting in an 8 year loss of 1.4b
in 12 years F has taken 1.1billion taxpayer money, resulting in an 8 year loss of 1.1b

So Boiling that down, an assuming the government spent no money on the car industry ...
Averaging the taxpayer money to get an 8 year figure

Ford 8 year loss is 1.8 Billion
Holden 8 year loss is 2.6 Billion

Holden has been pulling someones leg somewhere !

[jpd80]

Originally Posted by EgoFG

So

in 12 years H has taken 1.8billion taxpayer money, resulting in an 8 year loss of 1.4b
in 12 years F has taken 1.1billion taxpayer money, resulting in an 8 year loss of 1.1b

So Boiling that down, an assuming the government spent no money on the car industry ...
Averaging the taxpayer money to get an 8 year figure

Ford 8 year loss is 1.8 Billion
Holden 8 year loss is 2.6 Billion

Holden has been pulling someones leg somewhere !

Where are you getting the $1.1 billion taxpayer money from for Ford?

Please don't tell me you are counting input tax credits as these are taken
from supply credits and added at the sale end in the form of GST.


Both companies have been taking impairments and write downs for years,
this exit has been done for ages right in front of everyone.

[Wretched]

I don't care for this Ford vs Holden vs Toyota vs god knows what in terms of who has the biggest losses and who used more tax money. The issues are the losses themselves over such a long period of time.

Where are they stemming from? I understand much R&D and other associated costs are included when new models come out ($1b for VE, $500m for BA) but to continue losing money obviously shows their business models are not working.
Is it isolated to these companies or other multinationals? I suppose I am looking at it from the bigger view, why is it costing so much to manufacture cars here? It cannot be just one area that is causing such massive losses (over numerous years).

Anyway rant over. Hopefully Ford begin their road to recovery over the next year with the introduction of more world products.

[Road_Warrior]

Originally Posted by Wretched

I don't care for this Ford vs Holden vs Toyota vs god knows what in terms of who has the biggest losses and who used more tax money. The issues are the losses themselves over such a long period of time.

Where are they stemming from? I understand much R&D and other associated costs are included when new models come out ($1b for VE, $500m for BA) but to continue losing money obviously shows their business models are not working.
Is it isolated to these companies or other multinationals? I suppose I am looking at it from the bigger view, why is it costing so much to manufacture cars here? It cannot be just one area that is causing such massive losses (over numerous years).

Anyway rant over. Hopefully Ford begin their road to recovery over the next year with the introduction of more world products.

The article explained that the large losses are to do with asset depreciation and devaluation of their fixed assets, due to the decision to close. GoAuto puts it like

Of the total $267 million Ford lost last year, $242 million of that came from the write-down of its manufacturing line in Campbellfield and engine plant in Geelong.

Without that writedown, the financial result would have been a $25 Million loss.

[EgoFG]

Originally Posted by Road_Warrior

The article explained that the large losses are to do with asset depreciation and devaluation of their fixed assets, due to the decision to close. GoAuto puts it like



Without that writedown, the financial result would have been a $25 Million loss.

What was the H write down, and their "loss" ?


Personally I find the difference betw H and F to be quite telling, and if half of Au understood that there would be even less H sales

[1TUFFUTE]

In a market that spiralled down its near impossible to stay afloat, hence why everyone is exiting local production. Everyone had the same info, the same fortune tellers......yet Holden still go on spending billions on new models.
Now THATS a disgusting buissiness model if you ask me.
You can't tell me the billion dollar baby, the ve commadore is 500 million better then the falcon. If it's better at all!!
Ford has kept its belt tight, in many matters over these last few years......including Motorsport funding and cutting models from lineups.

What does Holden do? Spend as much cash as humanly possible in TWO v8 supercar teams and driver lineups......and builds an epic new vf lineup despite the end being near. Yeah great car, but who pays for it.
Holden then tries to blackmail the government into getting more money!

Ford has done a FAR better job in softening the ugly blow in a realistic manner.
Holden strategy? ......well thats straight out of GM s Bailout book......

[1TUFFUTE]

And didn't Holden just report a 550+mill loss yesterday. Makes fords. 250 mill look soft! Considering ford actually used govco money to build Eco cars here.....where's the good news at Holden?

[EgoFG]

Soz, My source was the xxx JD : http://www.news.com.au/finance/busin...-1226914865119

If I get the time over the next few hours I might be able to express the loss per car sold - and from a quick squiz I reckon that will not look good for H