The Blue Oval was $290 million in the red in 2011.

Despite $102 million of state and federal government support last year, Ford Australia recorded its biggest financial loss in decades – and possibly the largest in its history.

Figures for 2011 released today show Ford Australia made a $78 million operating loss and a one-off “tax impairment and accounting adjustment” of $212 million for a total loss of $290 million.

The previous worst result on record was in 2008 when the company reported a loss of $274 million; it posted modest profits of $13 million in 2009 and $26 million in 2010.
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Ford admits it may be the company’s worst financial loss; it says it only has readily accessible data dating back to 1997, although the Ford Discovery Centre website has financial records going back to 1981.

The president of Ford Australia, Bob Graziano, said the company was impacted by the payout of 250 factory workers made redundant, the continued decline in demand for Falcon, and limited supply of the Ranger utility that was supposed to be the brand’s bread-winner for the year.

The Ford Focus small car, that was supposed to be built locally but will instead be imported later this year from Thailand under a Free Trade Agreement, is now the company’s top-seller.

Graziano, who described 2011 as a “year of change for Ford Australia”, said: “We did incur a significant cost to the business but it was the right thing to do. Our plan remains … aligned to the global One Ford plan, which includes aggressively restructuring to operate profitably.”

Ford Australia chief financial officer Mark Rearick, said: “The tax impairment relates principally to tax losses that were generated in the current year as well … as well as brought forward from prior years.

“Instead of continuing to carry those losses forward on our balance sheet, we’ve come to the conclusion that we think the appropriate action is to actually bring those assets back down off the balance sheet.

“And that means they have to hit our net income. That doesn’t mean we pass on the right to be able to claim those back in the future. So this is more a book accounting entry.

“It’s not really reflective of our current business, it’s really cleaning up up the balance sheet for a number of assets that we’ve been carrying for a period of time.”

Ford Australia’s revenue fell from $3.3 billion in 2010 to $2.8 billion in 2011.

Last year was the seventh year in a row of sales decline for Ford Australia. The total number of vehicles sold (85,228) was down by 37 per cent from its previous-decade peak of 135,172 sales in 2004.

“While total vehicle sales were down we did … concentrate our sales into higher margin [models],” said Rearick. “The industry-wide decline in large car sales was … partially offset with small and medium cars.”

Despite the tough economic conditions Ford said it invested $282 million last year in research, development and facilities for local as well as global vehicle programs.

Over the past five years it had invested $1.7 billion on research and development, compared to $1.3 billion by General Motors Holden in the same period.

Ford said the $102 million of government support it received accounted for 3.6 per cent of the company’s revenue.

“We’re confident we’re making the right decisions, albeit tough decisions,” Graziano said.

When asked when Ford Australia would bounce back into profitability – or end its seven-year sales decline, Graziano said: “All we can do is continue to market the vehicles that we have. You’ve got a really competitive marketplace here and the customer has a terrific choice of vehicles to pick from.”

In his speech as the president and chairman of the Federal Chamber of Automotive Industries on Tuesday night, Graziano said: “We can’t ignore the fact that Australia has the most open automotive market of all advanced economies.”

He said there are more than 62 brands selling about 360 models sourced from more than 28 nations.

Source: smh.com.au

I'm no mathematician, but with a 2.8billion dollar profit(wow), even down from last year, posting a 290million dollar loss doesn't exactly put them in a position of definite financial impairment considering the circumstances.

What I think it does mean, as with asset reduction, and with some models going offshore the rest will eventually follow. So goes the "Ford Global" approach. Yes it will mean the death of the falcon as we know it, it's already been set in stone. In a few years fordmods will probably include discussions on 4 cylinder mustangs...(and 4pot falcons for as long as they last if they happen at all).

The big question is will the Australian market support it wherever it goes?

Not sure how many workers ford employs in australia nor how much the unemployment pays but surely if Ford Australia was to close down and say a 5000 workers were dumped on to the unemployment at an average of say $400 a week for a family thats making the taxpayer fork out over 100 million in unemployment in a year so surely an investment of 120 million is worth paying out to keep the workers employed. This gives the worker the satisfaction of having a job and keeping mind and body active.

Well worth the small investment by the government I think

so basically ford has collated their tax losses over the last few years and are now taking an earnings bath to cry poor to the government for a handout. if they have wiped all the losses of the books, then next year watch for a story on how the company has had a dramatic turnaround from a loss of nearly $300 million to the possible $20 million loss posted next year.

That's $2.8 billion in revenue, not profit. It's not possible to post a $2.8 billion profit and a $290 million loss, if those numbers were accurate Ford would of had a profit of $2.51 billion.

Although the FG does look good and has a fairly decent model list, I think the Falcon is ultimately going to be discontinued soon. They've already removed a few models with the introduction of the FG, no FG wagon (and now no wagon at all) and no long wheel base vehicles at all.

Unfortunately, I don't think many people will really like the 4-cylinder EcoBoost Falcon enough to actually buy one, Falcons are generally thought to be big, heavy fuel guzzlers with large I6 or V8 engines, and Ford used to market them as such and possibly continued to embrace that image for too long and didn't react to change it in time. Now they're trying to get rid of the 'Falcon' stigma and get people to buy one instead of a smaller engined Commodore or a Camry.

Having said that, the amount of 'men' I see putting around in all sorts of silly cars like a Hyundai Getz and others tiny 'lady' cars is insane. I would prefer to buy a secondhand vehicle than drive something so small, powerless, featureless and which often looks horrendous. Maybe that's just me...