Ford Australia Reports Profit for 2009

[Road_Warrior]

http://www.carsales.com.au/news/2010...in-black-19274

Marin Burela, President and CEO of Ford Australia, announced in a press conference today that the local manufacturer had posted a small, but significant $13 million profit for 2009. Burela advised the press that the 2009 outcome was a major financial turn-around from the year before -- to the tune of $287 million.

It was also, according to Burela, the first profit Ford Australia had incurred since 2005 and was achieved in a market environment of 7000 fewer vehicles sold by the company for the year, but with more money spent on R&D during the same period. Ford's investment in R&D for 2009 was actually 22 per cent higher than for the previous year.

"As we celebrate 85 years of manufacturing in Australia and 50 years of Falcon, Ford Australia is extremely pleased that our hard work and singular focus on the needs of our customers has seen us return to profitability a year ahead of plan," Burela told the local press.

"Like our parent company in the US, Ford Australia took decisive and immediate action at the onset of the global financial crisis in late 2008 in order to weather the breaking economic storm.

"We acted quickly to significantly restructure our business in line with the prevailing market conditions, which has resulted in a $13 million profit for 2009.

"We significantly changed our sales and production focus to build cars based on demand and introduced more fuel efficient vehicles like the Fiesta ECOnetic while improving the environmental performance of our locally manufactured models.

"The great work of our product development team paid off as the award-winning FG Falcon sedan increased its share of the large sedan segment from 25 per cent to 34 per cent over the year.

"We also streamlined our production build process and maintained a laser-like focus on our inventory management."

Burela says that the result was a reflection of Ford Australia "delivering profitable [sales] volume" and reducing the "manufacturing footprint". Basically, the company cut costs, avoided slash-and-burn discounting at retail level and built only those vehicles specifically ordered by paying customers.

In respect of the dealer inventory, Ford Australia can boast "the highest turn rate in Australia," says Burela, meaning cars arriving at the dealers are being snapped up by buyers in short order -- typically within a month.

Burela attributes Ford's impressive resilience during the Global Financial Crisis to its foresight. Seeing the coming crisis, the company embarked on what the president describes as a "significant seismic shift" in the way it conducted its operations. Burela believes the change for the better was a consequence of "taking the right steps to shore up" the business, which was "restructured" very quickly.

Among other measures, Ford also reduced its inter-company borrowings by a figure Burela puts at between 42 and 45 per cent. It has been able to set and maintain retail prices at levels allowing more profit and this has been, in part, a consequence of the company's resurgent "brand appeal" and finding "a new type of customer".

The profit reportedly puts Ford Australia ahead of its financial plan for 2009. That, in turn, bolsters the company's confidence in its sales and marketing strategies for the current year.

Burela predicts that the Aussie new-car market in 2010 will exceed a million units once more. Other executives heading up his competitors -- and even Burela himself, just a few months ago -- have been more conservative, suggesting that the local market won't return to seven figures before next year. Burela is basing his optimism for Ford over the next 12 months partly on the speculation that the 2010 market will be bigger than expected.

With this in mind, and also taking into account the introduction of the EcoBoost Falcon and liquid injection LPG system in coming months, Burela anticipates local production at Broadmeadows could improve by as much as 20 per cent this year. The production line has been working overtime for the past "six or seven months," excluding the holiday period in January of this year and demand remains high for specific variants of the locally-manufactured Falcon and Territory range. These are the XR6 Turbo, the G6E Turbo, Territory TX and Territory Ghia.

Is that before or after tax profit??

[russellw]

Ford Australia Reports Profit for 2009

Ford Motor Company of Australia Ltd (Ford Australia) today reported a net after-tax profit of $13 million for 2009, an improvement of $287 million on 2008.

The company’s first profit since 2005 resulted from:

• Sales revenue of $3.14 billion;
• An improved company cost structure implemented at the end of 2008; and
• The non-repeat of several one-time actions associated with the company’s restructure.

“As we celebrate 85 years of manufacturing in Australia and 50 years of Falcon, Ford Australia is extremely pleased that our hard work and singular focus on the needs of our customers has seen us return to profitability a year ahead of plan,” said Ford Australia President and CEO Marin Burela.

“Like our parent company in the US, Ford Australia took decisive and immediate action at the onset of the global financial crisis in late 2008 in order to weather the breaking economic storm.

“We acted quickly to significantly restructure our business in line with the prevailing market conditions, which has resulted in a $13 million profit for 2009.

“We significantly changed our sales and production focus to build cars based on demand and introduced more fuel efficient vehicles like the Fiesta ECOnetic while improving the environmental performance of our locally manufactured models.

“The great work of our product development team paid off as the award-winning FG Falcon sedan increased its share of the large sedan segment from 25 per cent to 34 per cent over the year.

“We also streamlined our production build process and maintained a laser-like focus on our inventory management.

“These actions were not easy, and could not have been undertaken without the hard work and dedication of our employees and our dealers.

“But they have delivered on the goal of improving our cash reserves and returning Ford Australia to profit despite an industry-wide downturn in sales, providing a strong base for continued growth and profitability.”

Sales revenue was generated from retail sales of 99,279 vehicles during 2009. While this is lower than 2008 the profits generated from these sales were higher, reflecting a number of key actions, including:

• A rise in Falcon sedan share from 25 per cent to 34 per cent;
• Increased demand for higher-value models;
• Improved manufacturing efficiencies and streamlined build processes;
• A build-to-order production schedule tailored to market demand; and
• Strong inventory management.

Ford Australia increased production volumes in the last three months of 2009 by implementing overtime in its Victorian-based plants, a trend which has continued each month so far in 2010.

“We are continuing to see an improvement in our business fundamentals by strengthening our brand appeal and delivering vehicles customers want and value. We expect this positive trend to continue through the rest of 2010,” Mr Burela said.

Continued investment

During 2009, Ford Australia announced a continued investment program of more than $230 million across its locally produced vehicle line-up.

Aimed at delivering improved fuel efficiency and reducing emissions, the $230 million investment will result in the introduction of the world’s first rear-wheel-drive EcoBoost 4-cylinder engine in Falcon in 2011, as well as the introduction of a class-leading liquid phase injection LPG system for Falcon and the launch of a new turbo-diesel engine for Territory, also in 2011.

In 2010 the company has continued to invest in its local operations, including the recent announcement of a $20 million program to upgrade its Geelong-based casting plant, which will allow it to produce approximately one million brake parts annually for Bosch Chassis Systems Australia.

“Our casting plant investment is just one example of Ford Australia taking a different approach to our business to ensure our long-term success in Australia,” Mr Burela said.

“In addition to being a major vehicle manufacturer we are now also a supplier to the broader automotive industry through our innovative partnership with Bosch, repositioning us for an even stronger future.”

Milestone year

During 2010, Ford Australia is celebrating 85 years of manufacturing in Australia and the 50 year anniversary of the iconic Falcon sedan, the longest-running vehicle nameplate in the history of Ford Motor Company.

To celebrate, the company is releasing a series of special edition Falcon 50th anniversary models. Production of the special 50th anniversary models will commence in June, with each model featuring unique exterior design elements, exclusive interior finishes and additional standard equipment.

“The Falcon's long and distinguished heritage is unmatched by any other car in the history of Australian motoring,” Mr Burela said.

“Fifty years of continuity in any industry is a remarkable achievement, but it’s especially rare in a dynamic field like the car industry.




Source Ford Media

[Polyal]

And it theory its only going to get better.

New(ish) Territory
I4T
Diesel
5.0L
New Focus
T6
LiLPG

[4Vman]

Outstanding!! It also vindicates their strategy and should silence the critics who want market share at any cost...

[Polyal]

Yeap, oh and add to that the extra income from the latest manufacturing deal (one would hope there would be a bit in it!)

[Dr Smith]

Excellent news. IIRC didn't Holden say they would have made a small similar profit if they didn't have the $200Mill loss of the cancelled US exports. So Ford, on smaller sales volume has made a bigger profit.

Which proves Ford is not chasing "sales numbers' but rather trying to become profitable...and succeeding!

[phillyc]

Well, that is FANTASTIC news. I also have a bit of a "I told you so!" feeling too.

This announcement comes just 5 weeks after GM Holden lost $210.6 million in the same period.

Marin has done a excellent job of steering the company during a tough time and making, for the most part, the right calls.

FG Falcon sedan outsold VE Commodore sedan on a number of occassions last year too. As i'm sure it did in April 2010.

With Ford Motor Co also making money last year and $2.3B profit in Q1, the only thing to make this better would be GRWD.

But in the meantime, a 50th Anniversary Falcon, 85th Anniversary Ltd Editions of all cars (hopefully) and the continued rise of Fiesta, plus Ecoboost Falcon and facelifted Territory and diesel coming. Good times are ahead!

Well done Ford!

[phillyc]

Originally Posted by 4Vman

Outstanding!! It also vindicates their strategy and should silence the critics who want market share at any cost...

Exactly, during the same period GMH lost $210M trying to chase Lutz's on again off again dreams.

Their outright sales numbers might not be as high, but a profit is being made

Well, in April 2010 Ford outsold both GMHolden and Toyota for locally made product. It's also been mentioned that the aim is to keep doing that for at least the next 3 months too!

[jpd80]

Looks like the failure and cancellation of the Pontiac G8 was the difference between Holden and Ford Australia.
Everytime we think the Falcon should be exported to the USA, these figures should be quoted.....

[Fordman1]

Great effort,

tightened the purse strings, did the up front re-balance, right sized the business, made cars to dealer orders, and changed the model mix as they saw fit during the year.

2010 should be significantly better - with ZERO down days...........

Government Motors Holden - have 13 downdays in the next few months !!

[Polyal]

Originally Posted by jpd80

Looks like the failure and cancellation of the Pontiac G8 was the difference between Holden and Ford Australia.
Everytime we think the Falcon should be exported to the USA, these figures should be quoted.....

Without going too off topic we do not know how well (apparently not) it was handled. How well did they actually back it up through marketing etc etc.

There is merit in exporting, but lets be honest, even if we did get some markets can we even increase capacity enough to fulfill the orders?

[Joe5619]

Great news!! Nice to see profit can be made on the current (well 2009 levels) of production.. This should get better this year with them tracking at double digit growth on locally built cars. As long as Ford Aust can stay profitable I think locally built Falcons will stay.. HOPEFULLY

I've said it before & I'll say it again.. Profit, not sales!!!

[vztrt]

http://theage.drive.com.au/motor-new...0506-uem3.html

Ford Australia posts $13 million profit
BARRY PARK
May 6, 2010

It’s only a modest profit but Ford Australia is back in the black after a tough year.

Ford Australia has shrugged off one of the blackest years in its history, today posting a modest $13 million after-tax profit for the 2009 calendar year - or about $130 for each car it made here.

The positive result follows a four-year run of red ink for the car maker, which in 2008 lost $274 million after buyers fled from new-car showrooms in response to the global financial crisis.

Revenue from sales last year fell by $200 million to $3.1 billion, but Ford Australia chief executive Marin Burela said efficiencies in the company’s Australian car-making business and a focus on “profitable volumes and profitable vehicles” had helped the company make what amounted to a $287 million turnaround.

Ford built about 7000 fewer Falcon family cars and Territory soft-roaders at its Broadmeadows-based manufacturing facility after changing its production process to ensure each car rolling off the line had a buyer waiting in the showroom. Total production for the year was 99,279 vehicles.

Mr Burela said the car maker decided in October 2008 to have an “absolute laser focus” on its inventory of cars sold in Australia, and this had helped the company become cash-flow positive over the last 12 months.

“The manufacturing costs of our products are down, efficiencies are up, and at the end of every month we have nothing left over,” he said.

He said the company had also used its cash to pay down debt and grow its cash reserves.
Mr Burela said the small profit had not come at the cost of research and development of new products, which had increased by $55 million over its 2008 expenditure.

He said Ford Australia was also trading positively so far this year, and had introduced overtime at its plant for the last three months of last year to meet a growing demand for its locally made cars. Ford Australia’s parent company was the only US-based car maker to not extend its hand out for a government bailout after the global credit crunch struck in 2008, sending rivals including Chrysler and General Motors into bankruptcy.

Ford posted a $US2.1 billion profit in the US for the first quarter of this year.

Local rival Holden, meanwhile, posted a $210.6 million loss for calendar 2009 — the fifth run of red ink at the Red Lion in as many years.

[EgoFG]

So here is the 'productivity gives profit' argument:

Holden sell 119,568 vehicles and turn 3.8 billion revenue into a loss of 210.6 million.
OK lets ignore the loss due to the export mistake and call it a profit of 12.8 million

Ford sell 23000 less vehicles (96,501) with 660 million less revenue (ie 3.14 Billion) make the same profit (13 million)

Ford is a more efficient and productive company


Holden: Revenue Per Vehicle Sold: $31,781
Ford: Revenue Per Vehicle Sold: $32,539

Holden: Profit per vehicle sold: $107 (or loss of $1,761 including failed export program)
Ford: Profit per vehicle sold: $135
(of course the profit figures would be skewed by reporting tricks that we would assume both companies use equally)

On average Ford makes 30% more profit per vehicle sold !

[Polyal]

In all honesty I reckon a $13M profit is as good as $130M for FoA in Ford's eyes. If they can atleast pay their way then there is less reason to change things, $100M in Ford NA's coffers wont make to much difference, but it gives FoA something to hang their hat on.

[Nikked]

13m is alot of profit for a small country.

[XR8putts]

Made my day. Stoked!

And it's so bloody good to have it finally confirmed! Wonder what the Holden fanboy's excuse will be now.

Bravo Ford AU.

[dannyhilton]

There you go. Have to say I'm seriously proud of that result, especially considering the market in 2009. I'm hoping with improved sales this year, a better market, and some truly great products can push Ford into the black for a second year running. 2011 however looks like the year of all years for Ford, and while with all the big releases may not see a profit it'll be the year that sets the trend for sales:

- 2.0L EcoBoost Falcon. Opens the market to fuel conscious private sales and a huge potential for fleet sales.
- New LPG engine. Again, private and fleet markets alike will rejoice over this.
- 5.0L V8. It'll be established, and by 2011 should be winning back some market share from the red side.
- Revised Territory. Finally, a decent makeover, and a 2.7L Diesel engine should give the Territory a decent boost.
- New Focus. In Australia's biggest market, the small sedan/hatch combo should win Ford some major market share by the looks of what they've produced.
- Kuga. There's talk that this will be manufactured in Thailand to replace the Escape, if so I'm excited. May not be a huge seller, but great for Ford's image.

Most of this depends on one factor though, can Ford produce the Falcon/Territory/Ute in bigger numbers (lets face it, there's some great potential to increase sales here) and will doing so keep them profitable? They've proved you don't need volume, but two of these new engines will hit a sweet spot with fleets, and with a diesel Territory, private buyers will surely be wanting in on that.

I can't wait to see what Ford comes up with, personally I'm very positive for the future of Ford Australia, and the Falcon.

[Road_Warrior]

Originally Posted by EgoFG

So here is the 'productivity gives profit' argument:

Holden sell 119,568 vehicles and turn 3.8 billion revenue into a loss of 210.6 million.
OK lets ignore the loss due to the export mistake and call it a profit of 12.8 million

Ford sell 23000 less vehicles (96,501) with 660 million less revenue (ie 3.14 Billion) make the same profit (13 million)

Ford is a more efficient and productive company


Holden: Revenue Per Vehicle Sold: $31,781
Ford: Revenue Per Vehicle Sold: $32,539

Holden: Profit per vehicle sold: $107 (or loss of $1,761 including failed export program)
Ford: Profit per vehicle sold: $135
(of course the profit figures would be skewed by reporting tricks that we would assume both companies use equally)

On average Ford makes 30% more profit per vehicle sold !

That $210 Million loss that Holden made in 2009 included those same (or similar) 'special items' that Ford had to deal with in 2008.

[dannyhilton]

And Holdens official response to the Ford profit?

http://www.holden.com.au/microsites/...eaderImage#/6/

BAHAHAHAHAHAHAHA! GM had to throw them a lifeline!

[phillyc]

Originally Posted by Road_Warrior

That $210 Million loss that Holden made in 2009 included those same (or similar) 'special items' that Ford had to deal with in 2008.

It also highlights that Ford is ahead of the game and smarter than it's competitor. Just like it's consumers!

GMH were too dumb, unwilling or unable to change their practices and sailed along with a she'll be right attitude just like their parent company. But looked good / strong to the general public. The reality is they needed a $200M loan from the Australian government, were unable to afford to pay redundancies and have continued to defer the next big thing. The Cruze, 3 times already.

Ford made the right decisions and copped the wrath of the media/public for cutting production and down-balancing. Just like their parent company did.

GM went bust to the tune of $100B and Ford US scraped through whilst heavily investing in future products. Ford US have now started to make sizeable profits.

Finally, notice the words that Burela is using. “Absolute laser focus”. This is a Mulally saying. Very promising.

[phillyc]

Originally Posted by vztrt

http://theage.drive.com.au/motor-new...0506-uem3.html

Wow, a Drive article that is positive towards Ford and realistic towards GMH. Oh, it's not written by Josh Dowling...

Originally Posted by drive

He said Ford Australia was also trading positively so far this year, and had introduced overtime at its plant for the last three months of last year to meet a growing demand for its locally made cars. Ford Australia’s parent company was the only US-based car maker to not extend its hand out for a government bailout after the global credit crunch struck in 2008, sending rivals including Chrysler and General Motors into bankruptcy.

Ford posted a $US2.1 billion profit in the US for the first quarter of this year.

Local rival Holden, meanwhile, posted a $210.6 million loss for calendar 2009 — the fifth run of red ink at the Red Lion in as many years.

Basically, Ford made a small profit after a horrid year before. Ford made the tough decisions earlier, just like their parent. Ford Aus are now profitable. Ford US is profitable. GM went bankrupt. GMH had a horror run last year and have lost money for 5 years straight...

[Joe5619]

Originally Posted by Road_Warrior

That $210 Million loss that Holden made in 2009 included those same (or similar) 'special items' that Ford had to deal with in 2008.

No they were not... There were COMPLELTY different 'special items'.. Ford where reducancy packages to right size the bussines.. Holdens were losses on a failed export program!!

[Wretched]

A good result by Ford. Well done, keep it up, you need to.

[phillyc]

This i find particularly interesting.

Ford's investment in R&D for 2009 was actually 22 per cent higher than for the previous year.

Mr Burela said the small profit had not come at the cost of research and development of new products, which had increased by $55 million over its 2008 expenditure.

Take those two figures together and Ford's investment in R&D was up from $250m to $305m last year. That is a significant spend. 10% of sales revenue. But, i'd imagine part of that is T6 as well as new Territory, diesel, LiLPG, EcoBoost & FG2.

Don't know of too many other companies in Australia investing $305million a year in R&D.

[Fordman1]

Originally Posted by Road_Warrior

That $210 Million loss that Holden made in 2009 included those same (or similar) 'special items' that Ford had to deal with in 2008.

Nope !

Ford right sized the business and topped up the Superfund ravaged by the GFC.

Holden ? They lost money on unsold inventory and lost business. They will have significant losses this year .. I'll put money on it !

[a_misfit]

Ranger development as well included in that? Or is that funded by Ford US?

[Franco Cozzo]

This is great, if Ford AUS keeps turning a profit I suppose it will make us look viable to Ford USA to keep the Falcon.

[fordv8!]

great stuff ford keep it up!

[4Vman]

Frighteningly quiet thread for what is one of the most significant good news stories for Ford in a long time...

28 posts in 6 hours? Come on guys, surely we're not just interested in bad news and controversy..

Had it been a loss posted im sure we'd be up to 5 pages by now.. not 1...