Ford Australia announces 2010 profit

[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...

[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.

[bobthebilda]

Originally Posted by SteveJH

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.

I dont think not spending $300 million on R&D will make that money fall to the bottom line (as it could have done this year). Ford australia did alot of R&D work for products that arent, or werent going to be sold in Australia, they basically did contract work for Ford worldwide. Whatever money they earnt for doing the Ranger work etc, they got paid for, would have spent alot to do the work, and probably a small proportion dribbled down to the profit line.

If they received $200 million (just a guess) for the Ranger work from Ford worldwide, they would have had to spend $190 million (just a guess) to do the work that was required to get the payment.

[jpd80]

Originally Posted by bobthebilda

I dont think not spending $300 million on R&D will make that money fall to the bottom line (as it could have done this year). Ford Australia did a lot of R&D work for products that aren't, or weren't going to be sold in Australia, they basically did contract work for Ford worldwide. Whatever money they earned for doing the Ranger work etc, they got paid for, would have spent a lot to do the work, and probably a small proportion dribbled down to the profit line.

If they received $200 million (just a guess) for the Ranger work from Ford worldwide, they would have had to spend $190 million (just a guess) to do the work that was required to get the payment.

Bob, I'm beginning to wonder whether Ford and GM "load" their Australian divisions
with development costs and any other expenses they can in order to legally transfer
all the profits to centres that have much more favorable and "friendly" taxes,
could we be that dumb as to miss what is happening legally and in plain sight?

A lot of the Asian centres are extremely "business friendly" when it comes to tax incentives
and this coupled with cheap labor are the main reasons for setting up in Asian countries.

Now just suppose what happens if financial positions are well orchestrated to enable
Holden and Ford to have revenues of $4.4 billion profit and $3.3 billion respectively with little or
no taxable profit. If for one minute we think that motor companies actually know what they're
doing, it's really mind blowing to think they are legally transferring huge amounts of money away
from being taxed in Australia to their offshore plants and suppliers....and then ask us for grants.....

[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.

[jpd80]

Originally Posted by Joe5619

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.

I take it you mean $30 -40 million?
Yes but as we have seen Ford also paid something like $50 million of internal debt
and spent another $300 million on R & D, mostly on vehicles not intended for Australia....
had they not paid down debt and only spent 200 million on R & D, the profit could
have been $175 million or any other figure that suited their purpose.

I'm sure it's pretty easy to shift figures around to conjure a profit when needed in one year
and then easily turn around and announce a loss when it suits them for tax write offs...

[Road_Warrior]

Originally Posted by jpd80

$50 million of internal debt

This is a rather puzzling statement. Is this head office cash loans or cost shifting?

[jpd80]

Originally Posted by Road_Warrior

This is a rather puzzling statement. Is this head office cash loans or cost shifting?

when ever FoA presents a business case for the next product cycle, they're actually applying
for funding to make it happen, remember those $700 million launch figures or $400 million Territory?
It all has to be paid back to papa folks....

At the moment the tally is $475 million, not bad for the amount of new local products due out soon.....

So when you see those skinny profit/loss reports, think about the loan repayments in the
background and you'll see that both Ford and Holden are doing OK behind the scenes...

[Gobes32]

Originally Posted by jpd80

Now just suppose what happens if financial positions are well orchestrated to enable
Holden and Ford to have revenues of $4.4 billion profit and $3.3 billion respectively with little or
no taxable profit. .....

Very good post, it's true though. How remarkable to barely scrape through with that mauch revenue.......

[bobthebilda]

Originally Posted by Gobes32

Very good post, it's true though. How remarkable to barely scrape through with that mauch revenue.......

Two things we can be sure of. 1) The government may hand money over to the car companies without any checks or balances, but 2) you can be damn sure that the Tax department watches these companies very very well, to ensure their is no transfer pricing.

The Tax Department started watching the multinationals back in the early nineties, and you can almost be guaranteed that if they havent got employees embeded in the finance departments of Ford, Toyota and Holden, at the very least they have a special little department set up just to watch these and a few others. Toyota got pinged for a few hundred million last year, and the Tax Department is chasing Holden for about $150 million of "royalty" payments.

[Road_Warrior]

Yeah I would imagine that any organisation that is the recipient of such a large grant from the Gubmint would have a bit of extra scrutiny placed upon them. But those grants would also be subject to legal agreements.

[Gobes32]

True, would be very hard you would imagine.

[jpd80]

Originally Posted by bobthebilda

Two things we can be sure of. 1) The government may hand money over to the car companies without any checks or balances, but 2) you can be damn sure that the Tax department watches these companies very very well, to ensure their is no transfer pricing.

The Tax Department started watching the multinationals back in the early nineties, and you can almost be guaranteed that if they haven got employees embeded in the finance departments of Ford, Toyota and Holden, at the very least they have a special little department set up just to watch these and a few others. Toyota got pinged for a few hundred million last year, and the Tax Department is chasing Holden for about $150 million of "royalty" payments.

Bob, all I'm saying is that there is an awful lot of scope for companies to allow profit to stay with suppliers
and business units in other countries without the Tax department being able to do anything about it.

To think that companies sell products in the vicinity of $3 to 4 billion revenue and seemingly
make a pittance in terms of profit shows just how well the accountants are managing money....
Let's just say this, at the end of the day, everyone Holden or Ford deals with gets paid......