Ford Australia posts $267 million loss
BY MIKE COSTELLO | 13th May 2014
The result follows losses of $141 million in 2012 and $290 million in 2011, and comes on the same day as fellow Australian car-maker Holden posted a record $553.8 million loss, also due to a one-time write-down of its soon-to-be-closed Adelaide factory.
Ford’s result comes as small surprise, with its global parent based in Dearborn, Michigan, saying in its financial report released in January this year that it expected to take a big hit in Australia as it restructured the business.
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.
The loss also comes despite Ford receiving $72 million in taxpayer assistance last year.
Write-downs aside, Ford’s operating loss was $25 million, with its imported Focus small car, Kuga compact SUV and Ranger ute all making sales gains to offset a continued drop in sales of the locally made Falcon sedan (down 24.4 per cent) and Territory SUV (down 2.6 per cent).
Ford Australia also says its dealers are increasing their proportion of more profitable private sales. Thanks to the continued decline of the Falcon, sales to less-profitable large-scale fleets are half of what they were in 2010.
As announced, Ford will between now and the end of the year lay off a further 300 plant workers, with a plan to have a combined 700 staff at Broadmeadows and Geelong by December tasked with producing the final updated iterations of the Falcon and Territory due by the final quarter.
The remaining 700 workers will all lose their jobs by the end of 2016, which is the planned timing of Ford’s full factory closure. Ford has not ruled out pulling this forward if sales continue to fall.
Beyond this point, Ford Australia will retain about 1500 staff in Australia, 1100 of whom will work as designers and engineers at its healthy Melbourne-based Asia Pacific research and development hub, creating cars largely for India and China.
This means that once the Ford factories shut, and those of fellow car-makers Holden and Toyota switch off one year later, the Blue Oval will become Australia’s largest automotive employer.
Ford Australia claims its global parent has invested $1.9 billion in its Australian product development facilities over the past six years, including $340 million in 2013.
According to the official figures, Ford Australia collected $2.85 billion in revenue from continuing operations in 2013, down about $250 million on the year before.
Expenditure included a tick over $2.3 billion on costs of sales of goods, $107.1 million on marketing, $323.8 million on research and development, $151.5 million on administrations and $272 million on ‘other’.
Ford also chipped in $10 million to the federal and state government-backed Melbourne’s North and Geelong Region Innovation and Investment Funds to help displaced workers find alternate sources of income.
The company also held a suppliers’ trade fair in March this year in conjunction with the Victorian government to tee-up supply contracts within its international operations for hard-hit local parts-makers. So far, nine suppliers have earned new global contracts.
As of the end of 2013, the company held $921 million in current assets countered by about $1.07 billion in liabilities from borrowings, provisions and retirement benefit obligations.
