Holden slumps to $210m loss

[Ghiadude]

clear as mud....

[Nikked]

Originally Posted by XRtowcar

* 2009 - $210.6 million loss
* 2008 - $70.2 million loss
* 2007 - $6 million loss
* 2006 – $146 million loss
* 2005 – $144 million loss
* 2004 – $300.8 million profit
* 2003 – $285.6 million profit
* 2002 – $56.5 million profit
.

Links to info?

[Franco Cozzo]

Hold up, all the time I see these companies posting big losses, how do they stay alive when they are bleeding money so badly?

I thought once you hit $0 you're screwed? Or do they have billions of money in the bank?

[jpd80]

Originally Posted by Big Damo

Hold up, all the time I see these companies posting big losses, how do they stay alive when they are bleeding money so badly?

I thought once you hit $0 you're screwed? Or do they have billions of money in the bank?

They get bailed out by their parent companies....

[XR8putts]

Originally Posted by jpd80

They get bailed out by their parent companies....

Who inturn get bailed out by the Government...

[Franco Cozzo]

Originally Posted by puts99

Who inturn get bailed out by the Government...

Hmm, why won't the Government pay my debts off for me?

[GavL]

Originally Posted by Big Damo

Hmm, why won't the Government pay my debts off for me?

Do you really want to go down the path of bankruptcy

[The G6ET Spot]

Where abouts in the books is the $200 million dollar tax payer funded hand out located.

Makes for even worse reading.

[XRtowcar]

Originally Posted by Nikked

Links to info?

Just Google "Holden loss 2009,2008,2007" etc

[tapeworm]

It amazes me that even a cent can be alocated to motorsport, buying out teams etc.

[Nikked]

Originally Posted by XRtowcar

Just Google "Holden loss 2009,2008,2007" etc

Cheers

[bobthebilda]

Big Damo, History has shown that Holdens business methodology works for a while. Charles Ponzi employed it quite succesfully in the 1920's, then Alan Bond did it quite succesfully in 1980's and recently Bernie Madoff put it into practice.

[jpd80]

Originally Posted by The G6ET Spot

Where abouts in the books is the $200 million dollar tax payer funded hand out located.

Makes for even worse reading.

It's a loan replacing Holden's traditional lender who declined their export business lending.
Funny how Holden is borrowing cash to do exports, makes you wonder about Caprice PPV....

[jpd80]

Originally Posted by bobthebilda

Big Damo, History has shown that Holdens business methodology works for a while. Charles Ponzi employed it quite succesfully in the 1920's, then Alan Bond did it quite succesfully in 1980's and recently Bernie Madoff put it into practice.

Put simply GM's (Detriot three) traditional philosophy is:
- Overproduction of vehicles to keep factory order books full, managers bonuses are linked to this.
- Use strong cash incentives to shift vehicles off dealers lots increasing sales numbers

In the past Ford would have adopted the above methodology to get itself out of trouble.
When Mulally came to Ford he was stunned by the fact that almost everyone in Detroit
thought car production costs were fixed. Mulally proved that production costs are variable
and that you can right size production capacity to true market sales and still make a profit.

This is why Ford and GM are worlds apart but GM still looks to be trading well,
when that US government money runs out GM are going to be back at square one.

GM thinks Ford were just lucky to get their refinancing done when they did
and GM were just victims of bad luck with products and bad timing with the credit freeze.
A manufacturer with that attitude after taking a $50 billion bail out is set to repeat history.

[Chilliman]

Originally Posted by jpd80

Put simply GM's (Detriot three) traditional philosophy is:
- Overproduction of vehicles to keep factory order books full, managers bonuses are linked to this.
- Use strong cash incentives to shift vehicles off dealers lots increasing sales numbers

In the past Ford would have adopted the above methodology to get itself out of trouble.
When Mulally came to Ford he was stunned by the fact that almost everyone in Detroit
thought car production costs were fixed. Mulally proved that production costs are variable
and that you can right size production capacity to true market sales and still make a profit.

This is why Ford and GM are worlds apart but GM still looks to be trading well,
when that US government money runs out GM are going to be back at square one.

GM thinks Ford were just lucky to get their refinancing done when they did
and GM were just victims of bad luck with products and bad timing with the credit freeze.
A manufacturer with that attitude after taking a $50 billion bail out is set to repeat history.

Couldn't agree with you more! A shame the media can't see through the General's smokescreen :

[4Vman]

Originally Posted by jpd80

Put simply GM's (Detriot three) traditional philosophy is:
- Overproduction of vehicles to keep factory order books full, managers bonuses are linked to this.
- Use strong cash incentives to shift vehicles off dealers lots increasing sales numbers

In the past Ford would have adopted the above methodology to get itself out of trouble.
When Mulally came to Ford he was stunned by the fact that almost everyone in Detroit
thought car production costs were fixed. Mulally proved that production costs are variable
and that you can right size production capacity to true market sales and still make a profit.
This is why Ford and GM are worlds apart but GM still looks to be trading well,
when that US government money runs out GM are going to be back at square one.

GM thinks Ford were just lucky to get their refinancing done when they did
and GM were just victims of bad luck with products and bad timing with the credit freeze.
A manufacturer with that attitude after taking a $50 billion bail out is set to repeat history.

Exactly right.
That is the difference between a "commodity" and "premium" mindset.

[XRtowcar]

I geuss its better for GM to send cheap cars from Aus to the states at a possible loss so the Aussie outpost can look to be losing money so not to pay any taxation from a profit result. This shifts the profits to GM in the states wo can pass on the car to dealers with there margins intact.
Well would anyway if the G8 thing would of sold.
Only benefit to us is the volume of components can reduce costs in production.
And the government will always throw in a few bucks to help out.
Dont know if i have an overly simplistic view of the world?

[Stefan]

Originally Posted by bobthebilda

Philly C, there are many ways to report a positive cash flow, in years when you make a loss. Holdnens pay its large suppliers 4 months after they receive the goods. A commodore can be sold (and sales and cash flow recorded), 3 months and 3 weeks before even holden pay the suppliers (and the suppliers workers, and suppliers suppliers). And these can costs will be rolled into next reporting session.

I doubt 4 month payment terms have much to do with cash flow but more to do with quality control of a products supplied. ie if there is a problem with the parts the supplier does not get paid.

From a cashflow point of view GMH would be paying in this period for supplies received 4 months ago so the money for it's suppliers is still going out the door at a constant rate. The only cash benefit would have been in the first 4 months when holden started building cars but that was 100 years ago!

Sounds to me like GMH probably copped what we call "corporate recharges" from GM to the tune of $230M not unusual when a multinational reports a profit while the parent company is making a massive loss.

[jpd80]

Originally Posted by XRtowcar

I geuss its better for GM to send cheap cars from Aus to the states at a possible loss so the Aussie outpost can look to be losing money so not to pay any taxation from a profit result. This shifts the profits to GM in the states wo can pass on the car to dealers with there margins intact.
Well would anyway if the G8 thing would of sold.
Only benefit to us is the volume of components can reduce costs in production.
And the government will always throw in a few bucks to help out.
Dont know if i have an overly simplistic view of the world?

Pontiac ended up selling 41,000 G8s over 2008 and 2009 period but the cars were priced
at less than US$30,000 and for the most part had $3,000 to $4,000 cash incentives.

So even if you said they were left hooker SS Commodores, on currency conversion
that means they were selling for roughly AUS $28K to $32K..... :

What's even more perplexing is the similar priced Mercury Grand Marquis out sold and out lived the G8...

[bobthebilda]

Stefan, Its all conjecture really. As Holden dont release detailed reports on their financial performance, then we are only left to guess why a company would want to highlight their $200 million plus positive cash flow, whilst trying to downplay the $200 million plus net loss. If you want to scheme more money out of policticians, you dont say, "look, we lost 200 million last year, please support us more, we know we can be viable". You probably would go to them and say "this time last year, we had no money in the bank, and now we have $200 million in the bank, we are getting better". They may have an extra $200 million in the bank (free cash flow), but they may have at the same time increased their trade payables by $210 million dollars.

I would be quite worried if your scenario was correct. It just goes to show with all the secrecy attatched to these payments to Holden, Ford Oz, and Toyota Oz, that some of these australian taxpayer subsidies may just be ending up in Head office hands back in Japan or US.
It would be quite horrendous if australian taxpayer funds are sent back to US, so GM can bailout GM Daewoo, who can then make a cheaper Captiva, which competes against a Territory

[phillyc]

Originally Posted by jpd80

Put simply GM's (Detriot three) traditional philosophy is:
- Overproduction of vehicles to keep factory order books full, managers bonuses are linked to this.
- Use strong cash incentives to shift vehicles off dealers lots increasing sales numbers

In the past Ford would have adopted the above methodology to get itself out of trouble.
When Mulally came to Ford he was stunned by the fact that almost everyone in Detroit
thought car production costs were fixed. Mulally proved that production costs are variable
and that you can right size production capacity to true market sales and still make a profit.

This is why Ford and GM are worlds apart but GM still looks to be trading well,
when that US government money runs out GM are going to be back at square one.

GM thinks Ford were just lucky to get their refinancing done when they did
and GM were just victims of bad luck with products and bad timing with the credit freeze.
A manufacturer with that attitude after taking a $50 billion bail out is set to repeat history.

Possibly one of the best posts of the year.

[irish2]

Originally Posted by Stefan

I doubt 4 month payment terms have much to do with cash flow but more to do with quality control of a products supplied. ie if there is a problem with the parts the supplier does not get paid.

From a cashflow point of view GMH would be paying in this period for supplies received 4 months ago so the money for it's suppliers is still going out the door at a constant rate. The only cash benefit would have been in the first 4 months when holden started building cars but that was 100 years ago!

.

What if production is ramped up and they ask for a much bigger order? You have to purchase materials and then make the product to wait 4 months for the money. Most corporations work on a 45 day payment cycle.