Ford Australia has announced a $267 million loss for 2013 following the brand’s announcement it will end local manufacturing in October 2016.
Ford has stated in its annual financial report that it recorded a $242 million write-down of its manufacturing facilities which contributed heavily to the company’s $267 million loss. While it is a significant annual loss, Ford Australia posted an even worse figure in 2011 ($290 million).
Despite being the recipient of $72 million in government support during the 2013 calendar year, the company listed its operational losses at $25 million.
The company’s announcement in May 2013 that it would shut its local engine and car manufacturing facilities in 2016 will see the company lose 1200 staff over the coming years, leading to as much as $250 million being paid out to employees as part of redundancy provisions.
Ford Australia chief executive and president Bob Graziano suggested that four out of every five Ford models sold is imported at this point, and there are profits to be had from those models.
“Serving individual customers with world-class vehicles is driving the momentum of the transformation plan we announced a year ago.”
Sales of Ford’s locally manufactured offerings – the Falcon, Falcon Ute and Territory SUV – have waned in recent years. Falcon sales are down 27.9 per cent in 2014 (with just 2304 units sold to the end of April) on already low figures recorded last year, while the Falcon Ute has slumped 34.2 per cent so far in 2014 (926 units). The Territory – which had been holding up quite well until 2013 – is down a massive 36.1 per cent for 2014, with just 3067 units sold so far.
While the news is gloomy, Ford says there is a silver lining. The company claims it will retain the country’s biggest automotive workforce after it shuts its manufacturing plants, including 15oo jobs for design and engineering staff by 2018. Ford’s engineering revenue for 2013 accounted for $312.9 million, lessening the financial blow considerably.