Ford Australia announces 2010 profit

[Road_Warrior]

http://www.carpoint.com.au/news/2011...0-profit-24946

Ford Australia has today reported a net after-tax profit of $24.9M for the 2010 calendar year, a year-on-year improvement of $12.7M.

The company says its results have been bolstered by "continued concentration and improvement of key business fundamentals", including improved revenue from existing operations, more positive cash flow, and reduced intercompany borrowings.

Retail sales of 98,941 vehicles across Australia and New Zealand was a decrease on its 2009 volume of 99,279 units. In the face of these reduced sales, Ford says higherprofit is a direct result of its "continued emphasis on selling a richer mix of vehicles".

Other income streams include the receipt of federal Government ACIS credits linked to production and new vehicle program timings.

Ford says it madeg investments of more than $307M across research, development and facilities over the same timeframe.

Ford Australia President and CEO, Bob Graziano, said Ford Australia's position as a key contributor to the financial health of the Ford Motor Company ensured a positive outlook.

"Despite the changing economic conditions and segmentation challenges the industry faced during the latter half of 2010, Ford has recorded our second straight year of profit and we continue to make the right decisions for our business," said Graziano.

"We continue to invest significantly in our business, with a range of exciting new sustainability initiatives and new vehicles coming to market in 2011, all of which will attract more customers to the Ford brand," he said.

Well done boys and girls! Haters, GTFO.

[SS_01]

Thats great news, lets hope they keep it up!

[EDManual]

Good one!

[Road_Warrior]

http://www.goauto.com.au/mellor/mell...2578960027AB41

FORD Australia today announced its second consecutive annual profit, turning in a $24.9 million after-tax result for 2010 – almost double last year’s $12.7 million result.

However, company chiefs were coy about forecasts for the current year as they battle overstocking of locally made Falcon that has forced the company to cut production at its plants and axe about 240 workers – about 10 per cent of its workforce

Instead, Ford Australia president and CEO Bob Graziano pointed to the just-released facelifted Territory SUV and the refreshed Falcon due later this year which he says will help to drive fresh customer interest in the Australian-made cars as the year progresses.

So far this year, Falcon sales are down 41.5 per cent, while Territory sales are down 18.3 per cent. By contrast, sales of Ford’s main imported models are up, helping to bring the company’s sales volume deficit over last year to just 3.3 per cent to the end of April.

Ford Australia did not rule out further adjustments to production at its factories, but company chief financial officer Frank Lazzaro said the production line ‘balance’ had been set where it needed to be, “not just for the next two or three months but for the reasonable future.

“We can’t ever say never (to further cuts), and we really need to look at what we do introduce the new technologies that Bob (Graziano) talked about earlier, and ensure have got the line balance about right.

“We could reach the stage where we need to put some more back into the plant. It can go both ways right now.”

Australian taxpayers helped to keep the company in the black in 2010, with grants from the federal government Green Car Innovation Fund and other funds contributing a large portion of the $116 million “other income” on the 2010 balance sheet.

Although the profit is modest, the result is a far cry from the disastrous $274 million loss by Ford Australia at the height of the global financial crisis in 2008.

But it also has some way to go to match its record $148 million profit in 2005, and comes up well short of rival GM Holden’s 2010 post-tax return of $112 million reported recently.

Toyota Australia is yet to announce its result for its 2010-11 financial year, but that is expected to show a marked recovery from last year’s $108 million loss that resulted from a huge $280 million tax slug.

Announcing the Ford results, Mr Lazzaro described 2010 as challenging, “especially the latter part”.

He said Ford had made the right business decisions in the past few years, allowing it to “deal with the reality of the market” to get its business structure right and make a profit in a competitive environment.

He said Ford’s vehicle sales were now focused on higher-level models – a “richer mix of vehicles” that are more profitable – helping the company to increase its profit, despite a slight decline in sales last year.

Mr Lazzaro said Ford was taking actions to address excess Falcon inventory, with a five-day production of 209 units a day on a single shift – about half the two-shift capacity of the plant.

The reduced production rate will kick in from July, dropping the line rate from 260 units a day.

In March, Ford also cut production to three days a week to help match stock with sales.

Mr Graziano said Ford was looking at stepping up marking activities around Falcon to help address the situation.

“We are looking at what we do here going forward, and working with our dealers as well to make sure we have the right mix of product at the showroom,” he said.

Ford’s $24.9 million profit was made on improved revenue of $3.3 billion – up from $3.1 billion in 2009 – but slightly fewer retail sales, with Ford volumes falling in 2010 to 98,941 vehicles across Australia and New Zealand – down from 99,941 a year earlier.

The company cut its debt from $525 million in 2009 to $475 million, while also improving is cash position to $232 million (up from $221 million).

The company tipped $307 million into research, development and facilities. Among to projects to benefit from that spending were the new Ford Ranger ute and an SUV built off the same T6 platform that is under development by Ford Australia engineers for international markets.

Apart from the just-released TZ Territory – with a diesel engine for the first time – and refreshed Falcon with the much-hyped EcoBoost four-cylinder engine option later in the year, Ford Australia is set to receive a new Focus small car and the Ranger ute in the second half.

This year, Ford Falcon sales have been hurt by the absence of an LPG variant, as it awaits a new liquid injection LPI version in the facelifted Falcon.

About 20 per cent of Ford Falcon sales were LPG powered until that variant had to be dropped because it was not Euro 4 compliant.

Rival Toyota is working half shifts at its factory at Altona, in Victoria, due to a shortage of parts in the wake of the Japanese earthquake, but expects to resume normal rates next month.

GM Holden is the only company working a full two shifts five days a week as it pumps out its new locally made Cruze small car and ramps up supplies of the Chevrolet Caprice Police Pursuit Vehicle (PPV) for export to North America.

[Quicksand]

Bloody well done Ford. That 41.5% drop in Falcon sales is horrifying though.

[vztrt]

http://theage.drive.com.au/motor-new...ul#makeComment

Taxpayers propel Ford Oz into the black
Andrew Heasley
May 20, 2011 - 3:27PM

Ford Australia posts a $24.9m profit for 2010 thanks to $116m in government credits.

Ford Australia today announced a net profit after tax of $24.9 million for 2010, after receiving at least $116 million in taxpayer subsidies.

It’s a $12.2 million profit increase over the 2009’s $12.7 million, and contrasts with a loss of $274 million in 2008.

The bulk of the $116 million subsidy came from credits from the federal government’s Automotive Competitiveness and Investment Scheme (ACIS), as well as some money from the $42 million allocated from the now-halted Green Car Innovation Fund.
Advertisement: Story continues below

The ACIS credits are calculated from production levels and new models, despite selling fewer cars this year than last.

That subsidy is treated as ‘‘other income’’ and flows through to the company’s pre-tax position of $45 million. But Ford says in order to receive that level of assistance, it invested $307 million in research, development and plant during the year.

‘‘In the process of getting some of the credits...we had to expend a considerable amount of R&D (research and development), said Ford Australia’s chief financial officer Frank Lazzaro. So if we don’t choose to spend the R&D we would have been more profitable as well.

‘‘The credits flow through to the bottom line, but so too does the expenditure in relation to getting a significant part of those credits,’’ he said.

Last calendar year, Ford Australia sold 98,941 vehicles here and in New Zealand, 338 fewer than in 2009. Of those sold, 50,173 were locally made, down on the 2009 tally of 54,100.

But Ford made more revenue, up $200 million to $3.3 billion from fewer sales, a feat it attributed to selling a ‘‘richer mix’’ of higher grade models, such as the Falcon G6 and G6E, rather than base models.

The 2010 result comes after last month’s announcement that Ford Australia is set to shed 240 factory workers’ jobs and cut production by 20 per cent from 260 to 209 vehicles a day from July.

The 240 jobs lost will bring Ford Australia’s manufacturing workforce from 1800 employees to 1560, and the total staff from 3400 to 3160.

‘‘What we’re doing is ...ensuring we’re matching our production to demand out there,’’ said Ford Australia president Bob Graziano.

The company is also pinning hopes on fuel-efficient engines and fuel delivery systems, such as the diesel engine for the Territory SUV, liquid injection for LPG Falcons and the yet-to-be seen Falcon four-cylinder variant.

One of the fundamental problems for Ford is that one of its locally produced mainstays, the Falcon, is selling slowly, with sales down 41.5 per cent this year.

Most are sold to fleets and then dumped a few years later on the used market, crushing resale values.

It also has ‘‘acres’’ of unsold new Falcons sitting in paddocks, local federal Labor politician Darren Cheeseman recently told The Age. He called for government fleets to bring forward their renewal programs.

[Falcman0o7]

3000 falcons are parked outside the plant! no where for them to go :(

[Falc'man]

Originally Posted by Road_Warrior

Well done boys and girls!

+1

Originally Posted by Road_Warrior

Haters, GTFO.

I was wondering why this thread was eerily quiet...

[bobthebilda]

So whats the moral of the story. Less local production in the sales mix, means bigger profits??????

[Falc'man]

Originally Posted by bobthebilda

So whats the moral of the story. Less local production in the sales mix, means bigger profits??????

No, that wouldn't be it.

[jpd80]

Originally Posted by bobthebilda

So whats the moral of the story. Less local production in the sales mix, means bigger profits??????

No, better controlling of costs is helping stop money bleeding away.


While the 2010 result is a good one, it's no indicator to the current state of play
especially with Falcons piled up around Broadmeadows plant for the past 6 months.

[Road_Warrior]

Originally Posted by jpd80

No, better controlling of costs is helping stop money bleeding away.


While the 2010 result is a good one, it's no indicator to the current state of play
especially with Falcons piled up around Broadmeadows plant for the past 6 months.

But surely with Ford selling quite a substantial number of non-locally made cars more than last year, this could offset the blow a bit? As someone said earlier, they aren't the Falcon motor company any more and can't afford to be...

[jpd80]

Originally Posted by Road_Warrior

But surely with Ford selling quite a substantial number of non-locally made cars more than last year, this could offset the blow a bit? As someone said earlier, they aren't the Falcon motor company any more and can't afford to be...

Model mix and Average transaction Price is Key, 2010 increased to $3.3 billion
which was slightly better than 2009 figure so in that respect the balance and
shift in buyer preference was well managed...

What is more concerning is that stockpile of Falcons which really became prominent late last year
and don't forget the 2010 result really does not reflect the drop off that happened in November
and has since been controlled by Ford reducing plant output to 3-day week, that issue will really
underscore the 2011 result, so Ford needs a big second half surge from EcoLPI and Territory.

We should be able to gauge Ford's success or otherwise from the next three months sales figures,
if that XR sale hasn't reduced the stockpile, then I'd expect even bigger cuts like the really sweet
$32,990 offer for ABN holders, maybe that gets extended to private buyers......

[Quicksand]

Why do Drive.com hate Ford so much? Did Ford setup those funds and incentives? Are Holden and Toyota not eligible for the same incentives? Ford played their cards right and came out with a tidy profit, two years in a row. They invested MILLIONS into the local economy and were rewarded for this by being eligible for the incentives.

Gah they make me sick. Have to always find something negative.

[Road_Warrior]

Originally Posted by Quicksand

Why do Drive.com hate Ford so much? Did Ford setup those funds and incentives? Are Holden and Toyota not eligible for the same incentives? Ford played their cards right and came out with a tidy profit, two years in a row. They invested MILLIONS into the local economy and were rewarded for this by being eligible for the incentives.

Gah they make me sick. Have to always find something negative.

No idea why Drivel hate Ford, but they also pulled the pi$$ out of Holden earlier this week about the aluminium panelled Commodore idea. And I think they said a similar thing in an equivalent article about Holden's 2010 profit as this one about Ford.

It's a Fairfax publication so gilding the lilly is probably their modus operandi and will never be of the same calibre as GoAuto and Carpoint etc.

[ray38l]

Originally Posted by Quicksand

Why do Drive.com hate Ford so much? Did Ford setup those funds and incentives? Are Holden and Toyota not eligible for the same incentives? Ford played their cards right and came out with a tidy profit, two years in a row. They invested MILLIONS into the local economy and were rewarded for this by being eligible for the incentives.

Gah they make me sick. Have to always find something negative.

drive are actually being fair in that article. I don't know who wrote it but there was an article about holden's profit saying the same thing about government grants.

[Wretched]

Originally Posted by ray38l

drive are actually being fair in that article. I don't know who wrote it but there was an article about holden's profit saying the same thing about government grants.

that would be this one
http://www.smh.com.au/business/subsi...427-1dwsz.html

There are many businesses that have some subsidies offered to them but I don't believe they subtract these from their bottom line.

I am not a big supporter of the car makers being subsidied to a point that they become reliant on them. I am much more in favor of them receiving assistance through innovation (a scheme similar to the green car fund but a little better organised).

A good result by Ford. Hope they can clear the car park out the back without losing too much money.

[jpd80]

FoA also managed to cut their internal debt by $50 million and dumped $307 million into research.

[BHDOGS]

I think the point is its not longer the falcon car company its now the one ford car company falcon doesnt mean as much as it did to them which is a good thing

[spvd02]

Can't gauge their success yet, as none of the models mentioned have hit the road yet. Seems to be delays everywhere! I'd say it'll take a good year or so for things to sort themselves out for the better.

Sounds like a small profit, though. Wasn't Holden's profit margin more than $100mil? Seems they're easily doing better than Ford Aus.

[jpd80]

Originally Posted by spvd02

Can't gauge their success yet, as none of the models mentioned have hit the road yet. Seems to be delays everywhere! I'd say it'll take a good year or so for things to sort themselves out for the better.

Sounds like a small profit, though. Wasn't Holden's profit margin more than $100mil? Seems they're easily doing better than Ford Aus.

Just keep in mind that Holden's revenue was approx $4.4 billion or about a third more than Ford's,
getting $100 million profit off that amount of revenue is nothing to crow about but I'm thinking
that a lot of that money is because of $149 million from green car fund - as was Ford's profit too.


Maybe a lot of revenue being redirected as "expenses" to minimize tax and maximize business
it is possible that profit for imported Ford cars stays with the Asian and European business units
and I'm guessing that Australia basically reports the profits from Falcon, Territory and Ute sales..

[phillyc]

HUGE INVESTMENT but a small profit.

In 2009 Ford Aus invested $320M in R&D and in 2010 that figure was $307M. This is far more than any other company in the manufacturing industry. Probably higher than anybody in Australia. Over the last 4 years the R&D most likely totals over $1 Billion.

This R&D needs to be advertised. "Investing in Australias future".

Well done on controlling costs and achieving a higher average sales price.

Now get the marketing happening! Fiesta and Mondeo ads are very good. More for the rest of the range.

[jpd80]

Originally Posted by phillyc

HUGE INVESTMENT but a small profit.

In 2009 Ford Aus invested $320M in R&D and in 2010 that figure was $307M. This is far more than any other company in the manufacturing industry. Probably higher than anybody in Australia. Over the last 4 years the R&D most likely totals over $1 Billion.

This R&D needs to be advertised. "Investing in Australias future".

Well done on controlling costs and achieving a higher average sales price.

Now get the marketing happening! Fiesta and Mondeo ads are very good. More for the rest of the range.

So, if there was no need for any R & D investment in Australia, the bottom line profit would be around $300 million.
That's simplistic I know but underlines the strategic importance of Australia in the FAPA region....

[Road_Warrior]

Originally Posted by jpd80

That's simplistic I know but underlines the strategic importance of Australia in the FAPA region....

Just on that point of importance, I found out yesterday that Ford has assembly plants elsewhere in APA region that have a production capacity that is a fraction of Broadmeadows, yet one in particular has just been awarded the contract to build the new Fiesta so head office don't seem to be that perturbed by production volumes as long as the profit is still being made.

[Bossxr8]

First 9 months of 2010 were very good and this profit is the result of that.

I would hate to see what the profit/loss is like for the last 8 months though, it would be a bloodbath. 2011 will be a significant loss, the new models will come too late to return Ford to profitability for 2011, but hopefully all goes well and 2012 results in lots of black ink.

[jpd80]

Originally Posted by Bossxr8

First 9 months of 2010 were very good and this profit is the result of that.

I would hate to see what the profit/loss is like for the last 8 months though, it would be a bloodbath. 2011 will be a significant loss, the new models will come too late to return Ford to profitability for 2011, but hopefully all goes well and 2012 results in lots of black ink.

One good thing is that Ford have been managing costs well even though there is a pile
of unsold stock there, it wont be a complete loss as most will still be sold well above cost.

Having months of 3-day weeks sounds bad but it's preferable to making even more unsold Falcons...
None of this helps when Ford is trying to stitch together a business case for next gen Falcon.

People threatening not to buy a proposed FWD Falcon is the last thing on Ford's mind,
getting anyone to buy the current RWD Falcon at the moment is challenging enough....

[Joe5619]

Originally Posted by jpd80

One good thing is that Ford have been managing costs well even though there is a pile
of unsold stock there, it wont be a complete loss as most will still be sold well above cost.

Having months of 3-day weeks sounds bad but it's preferable to making even more unsold Falcons...
None of this helps when Ford is trying to stitch together a business case for next gen Falcon.

People threatening not to buy a proposed FWD Falcon is the last thing on Ford's mind,
getting anyone to buy the current RWD Falcon at the moment is challenging enough....

Making 240 people redundant all but sures up a big loss for 2011 unfortunately..

[jpd80]

Originally Posted by Joe5619

Making 240 people redundant all but sures up a big loss for 2011 unfortunately..

Really?
If all of them average around $20K that would equate to around $4.8 million...

[Joe5619]

Originally Posted by jpd80

Really?
If all of them average around $20K that would equate to around $4.8 million...

Well, in the last 2 years (without redundancies), they have managed only a profit of 30-40K.. So how do except them to make up that 4.8 million expense this year, that they could not do in the last 2 years? Also the last round of redundancy resulted in a record loss.

But we are all just guessing & I'll be very happy to be proven wrong in 12 months times.

[SteveJH]

Originally Posted by Joe5619

Making 240 people redundant all but sures up a big loss for 2011 unfortunately..

Nope. Losses from local manufacturing could be more then made up by good sales from imported vehicles. In addition, depending on what other programs are on the go at the moment, Ford Australia may not spend 300+ Million on R & D this year.

Terry update is finished, FGII should be just about finished, Ecoboost i4 should be done or just about done and EcoLPI should be finished or just about finished.