(2011) Ford AU Posts Bigggest Annual Loss

[madmelon]

Selling more higher spec model Falcons with a bigger profit margin, huh?
Yeah right...

Originally Posted by CarAdvice.com.au

The local arm of the blue oval has bled red ink in 2011, announcing a $290 million post-tax loss that is Ford Australia’s biggest annual deficit on record

http://www.caradvice.com.au/172016/f...t-annual-loss/

[Wretched]

ouch!

[Chilliman]

Hard to remain optimistic after a result like that. As much as I would like to see Ford continue to manufacture in this country, I think its time to face facts and move to an all-import operation

[GTP-814]

so all the Govt has to do is to give the same handout to Ford, & everything is rosie.....

Just goes to show how a small county like ours is going to continue to find it hard to remain in manufacturing

Ford Australia’s announcement follows days after fellow local car maker Holden revealed its 2011 post-tax profit had slipped from $112 million in 2010 to $89.7 million.

Holden’s $89.7m result equated exactly to taxpayer handouts the company had received from the federal government.

[Rodge]

A huge part of these losses is what accountants call extraordinary items and not part of the core loss for the year. Notwithstanding this I liked the comment this gentleman called Peanut made on the Car Advice website

Ford needs a major overhaul of its Dealer Network, Marketing and Pricing Policies

[BHDOGS]

Que the a team music with Julia and Mr S swinging into action with pockets full of money

[Road_Warrior]

*sigh*...

[Joe5619]

Originally Posted by madmelon

Selling more higher spec model Falcons with a bigger profit margin, huh?

Why does this give you pleasure??


Sad day... Hate to say it, but time might be right to close local manfacturing for Ford?

[Road_Warrior]

I think the issue isnt local manufacturing, its the product they're making. Buyers simply don't want large cars anymore. The sales of the Falcon, Commodore and Aurion all underscore that.

[Joe5619]

Originally Posted by Road_Warrior

I think the issue isnt local manufacturing, its the product they're making. Buyers simply don't want large cars anymore. The sales of the Falcon, Commodore and Aurion all underscore that.

Problem is, it is too late.. Any change to a smaller car would now be many many years away if given the green light, what do they do in the mean time? The only hope we have is if Ecoboost fires And fires quick!! If that doesn't, Falcon wont make 2014, let alone 2016.

[dimka100]

There are a lot of things that Ford can still do to save costs and position themselves better in the market:

a. How about cutting 50% of the management, this will dramatically reduce the costs, and hopefully get rid of all the useless bureaucracy

b. How about lowering the RRP prices to reflect the actual amounts people pay for Falcons, after all many buyers get put off when they see the ridiculous Falcon RRP prices.

c. How about getting these basic electronic features finally implemented in the Falcon, yes things like auto up windows that most cars had since the 90s.

There are lots of things that Ford can do, but who am I kidding, its far easier to ask for more cash handouts in this country, or making up some excuses for things outside of their control.

[DJL351]

Originally Posted by dimka100

There are a lot of things that Ford can still do to save costs and position themselves better in the market:

a. How about cutting 50% of the management, this will dramatically reduce the costs, and hopefully get rid of all the useless bureaucracy

b. How about lowering the RRP prices to reflect the actual amounts people pay for Falcons, after all many buyers get put off when they see the ridiculous Falcon RRP prices.

c. How about getting these basic electronic features finally implemented in the Falcon, yes things like auto up windows that most cars had since the 90s.

There are lots of things that Ford can do, but who am I kidding, its far easier to ask for more cash handouts in this country, or making up some excuses for things outside of their control.

NotSureIfSerious.jpg
Oh god I hope that post is tongue in cheek.......

[Brazen]

Volume is needed to offset fixed costs.

Volume is critical in mass-production. They have to really start making another vehicle in the factory. Ranger probably needs more than one production base than Thailand, start producing it in Australia as well.

The writing has been on the wall for 6 to 7 years, people are moving to higher-content smaller cars. The day the announcement that Ecoboost Falcon was replacing the planned local Focus/Kuga I thought it was a catastrophe - events since then hasnt changed my mind at all.

[Road_Warrior]

Originally Posted by Brazen

Volume is needed to offset fixed costs.

Volume is critical in mass-production. They have to really start making another vehicle in the factory. Ranger probably needs more than one production base than Thailand, start producing it in Australia as well.

The writing has been on the wall for 6 to 7 years, people are moving to higher-content smaller cars. The day the announcement that Ecoboost Falcon was replacing the planned local Focus/Kuga I thought it was a catastrophe - events since then hasnt changed my mind at all.

The costs and complexity involved in reconfiguring the plant to allow it to produce a body-on-frame vehicle alongside unitary construction vehicles would be prohibitive. Enormously so.

I agree with everything else you have said though. Whilst I think the Ecoboost Falcon is a great idea and I hope it kicks some goals, Mr Burela screwed the pooch when he canned the local Focus production. Clearly very little forethought went into that decision in terms of the market direction and strategic planning for future products and demand of same.

[trippytaka]

Another reason for the suits to kill off Falcon... move to global platform, FWD, small engine etc.

[Polyal]

Ah well, it was due wasnt it? With todays mind set people think companies HAVE to make millions every year. Thats not to say they can get away with this type of result every year, but to think you can go on making profits without a loss isnt right.

Unfortunately there are many vultures waiting to dive right in.

I still think the Falcon has a place, but the problem is as Brazen said, you cannot produce such a car to world standards for our market, its just not big enough.

Show me anywhere else in the world that possesses two quality cars for local consumption only.

So you are left with the only option of finding more sales, even more than when the Falcon was dong well.

The key to the future of the falcon will be plugging into a GWRD platform or getting local (RHD) exports...thats it.

Chin up I say, we have two great new drivetrains in the cars, and I will repeat what someone else also said, you CANNOT have cheaper cars having more tech than the falcon and ask more for the latter; regardless of how much more practical it might be.

I still have faith, but Ford NA really need to announce what they want to do either way.

last edit: Also with Ford global doing so well surely they are not overly worried about that, if FoA cant show that its viable in the future then thats a different argument.

Its like the federal gov worrying about Tasmania being in debt when the rest of the country is doing well. (hypothetical obviously, but the point is the size compared to the bigger picture).

[BroadyFord]

Ford loses $290m as Falcon sales plunge

http://www.heraldsun.com.au/business...-1226350896748

FORD Australia has recorded its worst financial result, a $290 million after-tax loss.

The troubled local carmaker, whose iconic Falcon sedan continues to plunge in the sales charts, had an operating loss in 2011 of $78 million.

Ford Australia chief financial officer Mark Rearick blamed the after tax hit on a one-off $212 million tax impairment related to "tax losses generated in the current year and carried forward from prior years''.

"The operating loss is primarily explained by one-off costs associated with a restructure of the Ford Australia business, a continued industry-wide decline in the sale of large vehicles, and vehicle supply issues for both Ranger and Fiesta as a result of the Thailand floods,'' Mr Rearick said.

The company retrenched 250 workers at its Broadmeadows factory last year and reduced production to 209 vehicles a day to clear a backlog that had one point filled the factory's grounds with unwanted vehicles.

Ford's worst result since 2008, when it took a $274 million after-tax loss, came two days after chief rival Holden announced a $90 million profit for 2011, down from $112 million the previous year.

Ford last year received $102 million from the Federal Government's Automotive Transformation Scheme, almost the sum it invested in the locally made Territory and Falcon. The latter has just been released in its first four-cylinder engine version.

Ford Australia CEO Bob Graziano said the Falcon, most of which are sold to fleets, would once more be viable to those that had "a policy of four-cylinder vehicles only".

So far this year Falcon sales are down 30 per cent on 2011.

The Territory and Falcon were oustold again last month by the Focus small car, which is imported expensively from Germany. Mr Rearwick said the relocation of production in Thailand in a few months would lower operating costs.

Mr Graziano said Ford last year updated 85 per cet of its lineup and had "walked away from unprofitable'' areas of its business.

"We're confident we're making the right decisions, albiet tough ones, for the future of our business,'' he said.

[b0son]

Originally Posted by Joe5619

Hate to say it, but time might be right to close local manfacturing for Ford?

IIRC, you abused me 3-4 months ago when I suggested this...

[BroadyFord]

More excuses...

Ford Australia posts its biggest financial loss

http://theage.drive.com.au/motor-new...509-1ycap.html

Despite $102 million of state and federal government support last year, Ford Australia recorded its biggest financial loss in decades – and possibly the largest in its history.

Figures for 2011 released today show Ford Australia made a $78 million operating loss and a one-off “tax impairment and accounting adjustment” of $212 million for a total loss of $290 million.

The previous worst result on record was in 2008 when the company reported a loss of $274 million; it posted modest profits of $13 million in 2009 and $26 million in 2010.

Ford admits it may be the company’s worst financial loss; it says it only has readily accessible data dating back to 1997, although the Ford Discovery Centre website has financial records going back to 1981.

The president of Ford Australia, Bob Graziano, said the company was impacted by the payout of 250 factory workers made redundant, the continued decline in demand for Falcon, and limited supply of the Ranger utility that was supposed to be the brand’s bread-winner for the year.

The Ford Focus small car, that was supposed to be built locally but will instead be imported later this year from Thailand under a Free Trade Agreement, is now the company’s top-seller.

Graziano, who described 2011 as a “year of change for Ford Australia”, said: “We did incur a significant cost to the business but it was the right thing to do. Our plan remains … aligned to the global One Ford plan, which includes aggressively restructuring to operate profitably.”

Ford Australia chief financial officer Mark Rearick, said: “The tax impairment relates principally to tax losses that were generated in the current year as well … as well as brought forward from prior years.

“Instead of continuing to carry those losses forward on our balance sheet, we’ve come to the conclusion that we think the appropriate action is to actually bring those assets back down off the balance sheet.

“And that means they have to hit our net income. That doesn’t mean we pass on the right to be able to claim those back in the future. So this is more a book accounting entry.

“It’s not really reflective of our current business, it’s really cleaning up up the balance sheet for a number of assets that we’ve been carrying for a period of time.”

Ford Australia’s revenue fell from $3.3 billion in 2010 to $2.8 billion in 2011.

Last year was the seventh year in a row of sales decline for Ford Australia. The total number of vehicles sold (85,228) was down by 37 per cent from its previous-decade peak of 135,172 sales in 2004.

“While total vehicle sales were down we did … concentrate our sales into higher margin [models],” said Rearick. “The industry-wide decline in large car sales was … partially offset with small and medium cars.”

Despite the tough economic conditions Ford said it invested $282 million last year in research, development and facilities for local as well as global vehicle programs.

Over the past five years it had invested $1.7 billion on research and development, compared to $1.3 billion by General Motors Holden in the same period.

Ford said the $102 million of government support it received accounted for 3.6 per cent of the company’s revenue.

“We’re confident we’re making the right decisions, albeit tough decisions,” Graziano said.

When asked when Ford Australia would bounce back into profitability – or end its seven-year sales decline, Graziano said: “All we can do is continue to market the vehicles that we have. You’ve got a really competitive marketplace here and the customer has a terrific choice of vehicles to pick from.”

In his speech as the president and chairman of the Federal Chamber of Automotive Industries on Tuesday night, Graziano said: “We can’t ignore the fact that Australia has the most open automotive market of all advanced economies.”

He said there are more than 62 brands selling about 360 models sourced from more than 28 nations.

[madmelon]

Originally Posted by Joe5619

Why does this give you pleasure??

It really doesn't. It's me, a loyal Falcon guy (own two, am 26yo) from a loyal Falcon family (Including mine- 11x in 25 years, 7x were bought new) expressing my exasperation at the constant excuses and cover stories continuously being trotted out by Ford Australia Management.

Def'n of madness: Doing the same thing over and over and expecting diffrerent results.

[BroadyFord]

Ford manufacturing in Australia is officially finished.

This result, plus worse results to come are the get-out-of-jail-for-free card that Mulally will play when deciding where to source the next generation of vehicles from.

[Polyal]

So the open market comment reflects that there is not enough support for locals at the consumer end? IE taxes or other concessions or incentives to buy local?

How about the bloody gov have a local only policy to start with!

[Joe5619]

Originally Posted by b0son

IIRC, you abused me 3-4 months ago when I suggested this...

That was 3 months ago!!! You are 3 months smarter than me!!

However, maybe it was your tone more than the point you where making?? I'm not sure as I dont remember!!

[Chilliman]

I smell a conspiracy theory at work here. Most of the headline figure ($290Million loss) has come about because of 'accounting treatments'. I have a feeling that management has been given a directive from head office to paint the local operation in the worst possible light so that it easier to sell the closure of manufacturing operations.

Ford however runs the risk of destroying its 'brand equity' in this country to the point where even as an import only operation it would fail

[Joe5619]

Originally Posted by Chilliman

I smell a conspiracy theory at work here. Most of the headline figure ($290Million loss) has come about because of 'accounting treatments'. I have a feeling that management has been given a directive from head office to paint the local operation in the worst possible light so that it easier to sell the closure of manufacturing operations.

Ford however runs the risk of destroying its 'brand equity' in this country to the point where even as an import only operation it would fail

Not really, I've see this done 100 times.. Companies make a loss (in this case 78K) & know it is a bad year (so, senior management bonus will be crap anyway), so they take the opportunity to clean up the balance sheet at the same time. They just turn a bad year, into a really bad year.

[BlueOvalPrint]

Originally Posted by BroadyFord

In his speech as the president and chairman of the Federal Chamber of Automotive Industries on Tuesday night, Graziano said: “We can’t ignore the fact that Australia has the most open automotive market of all advanced economies.”

He said there are more than 62 brands selling about 360 models sourced from more than 28 nations.

Reading between the lines: "Aussies don't care where their car comes from anymore, so expect us to shut the gates at Broady and Geelong and bring in something elso we can make a real buck from".

Depressing.

[imugli]

Here's what I think is the real killer...

Ford Asia Pacific Africa (of which FoA is a part) lost US$92million last year according to Ford's full year release. This puts FoA squarely in the position of being the anchor holding them back, regardless of Thai floods etc.

Not a good position to be in...

[Chilliman]

Originally Posted by Joe5619

Not really, I've see this done 100 times.. Companies make a loss (in this case 78K) & know it is a bad year (so, senior management bonus will be crap anyway), so they take the opportunity to clean up the balance sheet at the same time. They just turn a bad year, into a really bad year.

That's an acceptable strategy if they're expecting a profit next year, but I've got the feeling that there's no turning the ship around from here!

[Joe5619]

Originally Posted by Chilliman

That's an acceptable strategy if they're expecting a profit next year, but I've got the feeling that there's no turning the ship around from here!

Correct..

Problem is, I think they did a "clean up" in the 2008's results, which would have helped with the profits in 2009 & 2010.. So the need to do in again in 2011 is a worry..

[XWGT]

Seems there in the middle of a large business transiton moving to more profitable vehciles in smaller numbers, so took the opportunity to recognise the tax losses in what was already a rubbish year.

This year they get less supply problems, and cleaner financials to try and make some headway.

Nothing wrong with that strategy. Must admit I've used an already crap year to clean up some long standing nightmares in the balance sheet once and for all to clear the way for a better year on paper.