Ford Australia posted a $274 million after-tax loss last year as consumers, already battered by the global financial crisis, shied away from large cars.
Capping off one of the roughest years on record for car makers here and abroad, Ford Australia’s revenues fell 7.4 per cent to $3.3 billion for the year to December 2008. Ford Australia made 108,564 vehicles, 5319 fewer than in 2007.
While Ford had the newest large car on the market with the FG Falcon – launched in May last year – it was beaten in the sales chart by the Commodore of its rival Holden, a car that has been the top selling car for 13 years.
Large-car sales plummeted last year after petrol price rises rattled buyers. Last year 119,559 large cars were sold – a 14 per cent decline – representing just under 12 per cent of total new-vehicle sales, of which the locally made Falcon accounted for 31,936, versus Commodore’s 51,093.
This is but a microcosm of the fallout in the world car-making scene, with General Motors in the US filing for Chapter 11 bankruptcy protection this month with debts of $US172.8 billion ($215.2 billion), following Chrysler, which did the same in last month with $US6.9 billion of debt.
So far Ford in the US has avoided the bankruptcy court, but global demand for cars is falling and only a radical turnaround can arrest the group’s long-term decline.
Ford Australia sought to put the best light on the results, saying that the underlying operating loss was just $14 million, compared with $99 million in 2007.
The president and chief officer of Ford Australia, Marin Burela, said: “This was a challenging year as the Australian market was affected by the global economic slowdown, but Ford Australia’s underlying business continued to improve with strong new vehicle launches and our continued progress in lowering costs and gaining efficiencies.”
Mr Burela returned to Australia to take the helm at Ford last November, after his predecessor, Bill Osborne, left the company after just six months in the role, filling a vacancy left by Tom Gorman in January. It meant Ford Australia had three different chief executives last year.
One-off items also battered the bottom line. These included $110 million in restructuring costs and long-term asset write-downs of $52 million, while superannuation expenses cost more than $151 million.
Mr Burela said the business was on track to improve on last year’s tripling in losses.
“We are continuing to improve our business fundamentals and implement our strategic plan as we move through 2009.”
Holden is yet to announce its 2008 results.
While Holden has been first to announce fuel-saving technologies, such as cylinder deactivation on its V8s (they run on four cylinders when coasting), recalibrating engines for better economy, with plans for compatibility with ethanol fuels, Ford Australia is still two month’s away from deciding its future fuel-saving technologies for its Falcon and Territory ranges.
Both Holden and Toyota Australia have projects in the pipeline that qualify for grants under the Federal Government’s $1.3 billion Green Car Innovation Fund, a scheme that is regarded as a critical in keeping factories going.
Ford is yet to approach the Government for specific projects, although it is expected to participate at some point.
Mr Burela told the Herald last week: “We’ve been quiet on this. I don’t want to go to Government every five minutes talking and asking for their support and engagement on things we’re not ready to make a statement on.”