Holden Worth Less Than A Fifth Of Previous Value: Gm

[f-wolf]

7 February 2014

By BARRY PARK

HOLDEN’S decision to quit manufacturing in Australia has reduced the value of the 70-year-old car-maker to just $US71 million, financial documents from its parent company show.

General Motors overnight released the full-year result for its global operations, announcing a $US3.8 billion ($A4.2 billion) pre-tax profit, well down on the $US4.9 billion result the car-maker pegged in 2012.

According to GM’s financial statements filed with the US Securities and Exchange Commission, Holden’s value in the eyes of its owner has plummeted from more than $US500 million ($A557 million) to just $US71 million since December’s announcement of its upcoming closure.

It also shows the restructure of GM’s international operations, including the end of car-making in Australia, will cost the company more than $US1.1 billion by the end of 2017.

The documents also spell out the steps the global car-making giant is taking to close down its Australian operations by 2017, including taking a big tax hit that would have helped Expensive Daewoo write off its $152 million loss pegged last year as it struggled with a high Australian dollar.

The car-maker is not expected to report a profit for 2013 when it reports its full-year result in the next few months.

The financial statements reveal that GM’s division that includes Expensive Daewoo was a big financial drain on the company.

GM’s Consolidated International Operations, the car-maker’s division that oversees Holden’s car-making business, reported about a $US200 million loss for the quarter once its booming Chinese division was factored out of the balance sheet – a big turnaround from the $US300 million profit it pegged the previous year.

The full-year result for GM CIO fell from a profit of $US500 million before interest and tax in 2012 to $US300 million last year.

GM executive vice-president and chief financial officer Chuck Stevens acknowledged there would be more financial pain ahead for the car-maker as parts of the business, including Holden, wound down.

“In 2013, we strengthened our fortress balance sheet and delivered consistent earnings, providing the foundation for a quarterly dividend for our shareholders this year,” he said.

“This year we’ll leverage our strength in the US and China to execute important restructuring activities in other key global operations.”

The statements also hint that a deal between the car-maker and its workers over severance payments is yet to be thrashed out.

“In December 2013 we announced plans to cease vehicle and engine manufacturing and significantly reduce engineering operations at Expensive Daewoo by the end of 2017,” the car-maker’s SEC filing says.

“Expensive Daewoo will continue to sell imported vehicles through its Expensive Daewoo dealer network and maintain its global design studio.

“Our Australian operations have been subject to unfavorable market conditions including the sustained strength of the Australian dollar, high cost of production and a small but highly competitive and fragmented domestic automotive market.

“In the three months ended December 31, 2013 we recorded pre-tax charges of $0.5 billion consisting of asset impairment charges including property, plant and equipment and exit-related costs including certain employee severance related costs.

“We expect to incur additional charges through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed.”

Planned factory closures in Europe and Australia and the withdrawal of the Chevrolet brand from Europe cost GM $US420 million last financial year. According to the financial statements, completing the restructure by the end of 2017 will add another $640 million in red ink.

According to GM, Holden’s announcement in December alone that it will no longer make cars in Australia beyond 2017 cost the company $US477 million.

As well, the financial balance sheets show GM’s Australian division is shaping up for a big tax hit as it fails to write off any losses generated by Expensive Daewoo against future income.

“At December 31, 2011 as a result of sustained profitability in Australia, we released the valuation allowance against deferred tax assets,” the report says.

“The reduction in the valuation allowance resulted in a non-cash income tax benefit of $502 million.

“In Australia we have net operating loss carry forwards which are subject to meeting a ‘Same Business Test’ requirement that we assess on a quarterly basis.

“At December 31, 2013 as a result of our plans to cease vehicle and engine manufacturing at Holden, we determined that it was more likely than not Expensive Daewoo would not realise a portion of the deferred tax assets and recorded a valuation allowance in the amount of $133 million.”

The statement also shows US factory workers will each get a $US7500 productivity bonus for helping the company do well in the booming North American market.

http://www.goauto.com.au/mellor/mellor.nsf/story2/C2995AD2405CC6F4CA257C780001385D

[f-wolf]

And we also got this...

Marshall Power says it is no longer viable to make batteries in Australia

3 February 2014

By BARRY PARK

UP TO 70 workers at an 80-year-old South Australian battery maker supplying all three local car-makers are likely to lose their jobs by the end of this year.

However, while Marshall Power said it would send its battery-making business to the Philippines – where its parent company is based – the decision to quit Australia was not tied in with Ford and Holden’s recently announced exit plans.

“This was a very difficult decision and not one made lightly,” Marshall Power Australasian sales and marketing director Andrew Duncan said.

“We are very proud of our manufacturing history and to lose some of our dedicated team members is always a last resort,” he said.

“We must ensure long-term viability and sustainability for the larger employee group."

About a third of the Australian car battery market is sourced from local manufacturers. Marshall Power’s brands include Exide and Marshall.

According to a statement from Marshall, the Edinburgh North factory will close late this year, and will be replaced with a distribution centre.

A spokesman for the company said it was still too early to say how many employees would run the distribution centre.

Marshall Power laid blame for the decision on the tough business environment in Australia.

“All viable options have been explored and due to competing imports and to deliver increased value to all Australian and New Zealand motorists, we have no choice but to fully utilise our associated companies to manufacture offshore,” Mr Duncan said.

“Whilst we are deeply saddened about losing some of our team, this announcement delivers long term viability and allows us to continue to provide best in class product and a new range that will secure continued supply and value to our customers.

“Our business will continue to supply Australian car manufacturers and our Australasian aftermarket customers.

“Today’s announcement is not attributable to any one specific factor and is not related to any decisions made by Australian car manufacturers. This is a commercial decision taken by our business," he said.

Marshall Power was founded in 1935, producing batteries for cars, boats, caravans, motorcycles, trucks and domestic use.

Early last year, Marshall bought the Australian arm of battery-making rival Exide for an undisclosed sum.

http://www.goauto.com.au/mellor/mellor.nsf/story2/BA13A93BC81D1EE4CA257C740020B279

[johno]

Which battery would you prefer, Marshall, or Exide?? A quick change of the sticker is all that's needed.

[Bizkets is Drunk?]

there both sh*t. century!!!!!!

[Never had any say Panda]

Optima..

[FPV TRANNY]

Super Cheap.................

[_Velocity_]

Banana republic.

[vixenf6]

We wont be able to feed, clothe, defend or shelter ourselves soon. ! what a great nation ... The ex ww2 war veterans would be so proud !

Tariff everything foreign to the hilt ....