Comments on: Ford Australia post $87.2m loss for 2007

By: Wheelnut

Wheelnut — Tue, 13 May 2008 10:11:55 +0000

I agree with you there starky – in a couple of years I expect that GM will decide to build LHD Holdens/Pontiacs in Canada whilst RHD Holdens will continue to be built in Elizabeth.

This will then free up some space on the line which will enable Holden to build other new cars such as the Sandman and Torana [which I think will be renamed the Commodore when it is finally released in a couple of years]

By: Wheelnut

Wheelnut — Tue, 13 May 2008 10:06:36 +0000

the reason we should be prepared to prop up the automotive industry is simple..

Because its less of a cost to have 10-15 million [working] taxpayers contributing towards the payments made by the gummint to keep the car industry here and maintain jobs.. than it would be to have 4-9 million people contributing towards the same amount if not more because approx 6 million people lost their jobs due to the flow on effect should we lose such a major industry.

By: Andrew M

Andrew M — Mon, 12 May 2008 10:17:04 +0000

Bret,
ive tried that line before too.

isnt it sad that we are in the minority that is up with reality in this world?

By: Bret

Bret — Mon, 12 May 2008 09:46:45 +0000

But it isn’t just the motor industry.
Its wines, paper mills, mining and exploration, whitegoods (no not the toyota type), glass products etc etc etc ad infin-bluddy-nitum.

By: No Name

No Name — Mon, 12 May 2008 09:35:06 +0000

Point well made Wheelnut but remember in the 70’s the UK government propped up the ailing motor industry. I failed to work and cost the tax payer millions. Subsequently the manufacturers were forced to go it alone. It hurt for a bit but now The UK has many foreign car owned manufacturing faciliities providing much employment. Honda, Toyota, Nissan, Peugeot, amongst many prop up what is now big business. Although European subsidies encouraged these companies here they only got initial funding and now stand on their own feet. Nissan for example are know to produce better built vehcles than the originators in Japan.
So why should the tax payer continually prop up the motor inductry.

By: realcars

realcars — Mon, 12 May 2008 08:14:26 +0000

u are right wheelnut. We are a developed country should be encouraging high tech manufacturing.

By: Me

Me — Mon, 12 May 2008 07:29:42 +0000

Hahahah , sucks to be FORD!!

By: Starky

Starky — Mon, 12 May 2008 07:14:41 +0000

Hehe, Holden’s will be worst. Polites (god rest his soul) saw the oil crisis coming (he supposedly gave a green light on a diesel Falcon, which was cancelled by Gorman), and was prepared. Ford is able to keep the losses minimized – these deficits are nowhere near as bad as what Holden’s will be. With Holden continuing to make these ~$150 mil losses, don’t be suprised if the Commodore is built in the US within 10 years if the G8 is popular and the US dollar stays at rock bottom – GM bosses are thinking “Why export from another country with minimal profit (possibly deficit) when you can export it there with a HUGE profit?”. Ironically, seeing that Ford doesn’t make exports to the US, limiting itself to it’s own country could be a smart move, at least for the Australian operations.

By: Me

Me — Mon, 12 May 2008 06:52:15 +0000

Hahahaha, sucks 2 be FORD!!!!

By: Wheelnut

Wheelnut — Mon, 12 May 2008 00:58:41 +0000

The only people who think/believe that the Federal Government should stop subsidising/protecting the Australian Automotive Industry are those narrow minded imbiciles who think that because they work in another industry other than the automotive industry – they will still have a job and be able to maintain the same standard of living etc as they do at the moment. They don;t seem to realise the negative impact the loss of such a mjor industry would have on the economy.

If Ford Holden and the other mob were to close and pull out of Oz; it would mean the [direct] loss of approximately 20-40000 jobs.. then therse the loss of jobs in other areas of the auto industry such as Parts suppliers and repairers etc.

which would mnean these former auto workers wouldn’t:
have any money in their bank accounts with which to repay mortgages; or be able to go on holidays; go to restaurants; buy new electrical equipment or furniture; buy or build a home; buy a new car

Which means there would also be a downturn in the activity in other industries including building; retail; banking; hospitality/tourism which would mean significant job losses in those industries as well.

Not only that because of so many widespread job losses there would be more people dependent on social security which would mean the govt would have to increase centrelinks budget inorder to cope with demand. This would then mean they would have to increase income tax and other charges on those who are lucky enough to still have a job so it would still have an effect on their standard of living too

By: Adam (aka Mada)

Adam (aka Mada) — Mon, 12 May 2008 00:21:43 +0000

Big deal. Up until 2 years ago Toyota AUS was in the red for long period.

Profits for car makers in Australia are cyclic.

By: Jimbo

Jimbo — Sun, 11 May 2008 23:41:05 +0000

Ford needs to change things up a bit. They have some good cars. As god if not better than Holden and Toyota. Bringing the new model Focus from Europe and start pushing the Mondeo harder would help Ford. Also put the FGs 4L six on the back burner and start pushing the proposed 2.7 Diesel.

By: Garry

Garry — Sun, 11 May 2008 19:37:00 +0000

I know send the Ford Bosses to Korea and they can get some ideas from Hyundai on how to run a car company,global car sales increasing at a fast rate,just reported a nice profit they pay their staff well and after 3 years your ford willnot be looking like a peice of crap because it is falling apart.Sorry some wont understand this 80% of the Australian population are braindead and/or rednecks when it comes to cars.

By: Joober

Joober — Sun, 11 May 2008 09:14:47 +0000

Well fingers crossed the FG will bail them out from this hole their in,

It would be a shame too Ford fall into the same fate as mitsubishi.

By: Duck

Duck — Sun, 11 May 2008 05:32:19 +0000

I couldnt bother less what ford does with their money!

By: Reckless1

Reckless1 — Sun, 11 May 2008 05:20:58 +0000

TP, I think you should stick to sucking Toyota lollipops.

You are out of your depth on any other topic.

By: Tp

Tp — Sun, 11 May 2008 01:27:46 +0000

Its going to reduce their taxable income*

By: TP

TP — Sun, 11 May 2008 00:51:34 +0000

Reckless a carried forward loss isnt offset against a loss, its offset against future profits. But yes it will reduce the after tax profit when they do make a profit

By: Reckless1

Reckless1 — Sun, 11 May 2008 00:06:58 +0000

Don’t forget that Ford also lost money the year before, that should help to paont a less rosy picture still……

By: Hmm...

Hmm... — Sat, 10 May 2008 22:36:35 +0000

just to clarify on the profit/loss for the period, there are a number of things you would have to consider (being an auditor of another large automotive manufacturer).

Development costs for the special tools used to develop the vehicle, including the “intellectual property” can all be capitalised as an asset (rather than treated as an expense) for the period it was under “Development” – the “research” component HAS to be treated as an expense.
And then you would have to assess the cash flows which you will receive from those and try and ‘match’ off the annual expense to the revenue.

What may have killed this figure was a number of inventory writedowns for BA/BF materials/parts which are in excess of their scheduled production, and also any special tooling (assets) which can not be used for the FG would have to be written down for the component of the asset if based on the current depreciation, once production finishes, the asset will still have a value > future cash flows (which will be nil).

other ‘one-off’ things that would have effected profit are redundancy payments (~640 jobs), and also a number of sales incentives provisions that your dealer would get in January/February to run out the BF if this relates to the vehicles already produced at year end…

hope that makes sense in layman terms… and also, to clarify on Loss AFTER Tax – yes, you don’t PAY tax, but you get a tax benefit to use against future profits, so it looks like this loss was actually $124m, then reduced by a 30% tax benefit…

So yeah, in summary – don’t take the bottom line as any future indicator of the company, you need to break-it up and normalise to find out what the true operational profit is…