GM Holden records $70 million loss for 2008

GM Holden may not have been alone in bemoaning the effects of the global economic crisis on its bottom line, but it is possible to sympathise with a company that, until the bottom fell out of the market in the third quarter of 2008, had been looking forward to making a "healthy profit" for the year.

Holden boss Mark Reuss (pictured) advised employees last week that, although the company recorded an after-tax profit of just $6.6 million during 2008, deficits relating to the closing of the Family II engine facility ($76.8 million) and top-up contributions to its "Defined Benefits Scheme" ($50.3 million) resulted in an all-up $70.2 million loss.

Breaking down the figures revealed GM Holden had a total revenue of $5.8 billion during the year, compared to $6.1 billion in 2007. Total sales revenue was $5.4 billion compared with the 2007 figure of $5.7 billion.

A bright spot was the increase from $1.6 billion in vehicle and engine export revenue in 2007 to $1.9 billion in 2008 (Holden sends V6 engines from its Fishermans Bend plant to Saab, Alfa Romeo and Isuzu).

Reuss said Holden spent $360 million on research and development during 2008 as part of its long-term future-securing policies. These include development of "More alternative fuel and fuel-saving technologies, concentrating on production of our new fuel-efficient small car and pursuing export opportunities."

Maybe an ominous comment was that GM Holden intends to continue focusing on "ongoing restructuring efforts" that -- among other things -- one would assume includes looking at employee levels.

The GM Holden loss follows Ford Australia's recent announcement of an after-tax loss for 2008 of $274 million, or three times the loss recorded in 2007. The loss figure was impacted by a special $110 million charge for staff redundancies, along with $151 million for "accounting adjustments for the company's defined benefit superannuation fund".

Ford Australia earned a net sales revenue of $3.29 billion for 2008, $168 million down on 2007. The positive side is that this comes with a lowering of operating losses, which dropped from $99 million in 2007 to $14 million in 2008.

By contrast, Toyota Australia earned a net after-tax profit, in the period April 1 2008 to March 31 2009, of $123.4 million – almost half that of the previous year. Sales revenue for Toyota during the period was $8.8 billion. The interesting thing is that the Toyota figure embraced a longer period of financial crisis than the January to December 2008 accounting period quoted by Holden and Ford.

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