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Holden Bounces Back, But Toyota Still Rules

Chris Gable
29 July 2008
www.wheelsmag.com.au

Its 2007 financial results, announced today, show that the car-maker is on track and here for the long haul, says new boss, Mark Reuss. But Toyota still rules the roost.

GM-Holden has announced a $6 million net loss for the financial year ended December 31, 2007. Even though it’s still in the red, today’s announcement represents a massive turnaround from Holden’s $146 million loss for 2006, which came on top of a $145 million loss in 2005.

GM Holden boss, Mark Reuss (pictured) announced the car-maker’s financial results in a national media teleconference from Melbourne this afternoon. It was his first financial report announcement since taking up the GM-Holden reins in February, this year.

Mr Reuss described the result as “a good news story” and “an almost break-even position”. “Put it another way,” he said, “[the result represents] about a $140 million turnaround over the last year.”

He said the results showed that GM-Holden had recovered in a difficult market and “strong headwinds” and was “…aggressively re-investing” in the future. Evidence of that re-investment, he said, was Holden’s announcement of the closure of Family II engine production and “… re-investing here in a range of alternative fuels and technologies to put us in a strong position to tackle the challenges here in the next decade”.

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Holden Narrows 2007 Losses

Marton Pettendy
29 July 2008
www.goauto.com.au

GM Holden has reported a $6 million after-tax operating loss for its 2007 financial year ending December 31, representing a substantial improvement on the hefty $146 million and $145 million losses it posted in 2006 and 2005 respectively.

Presenting his first financial report for GM Holden since becoming chairman and managing director in February , Mark Reuss said the result was a “good-news story” for Holden, describing it as a $140 million turnaround.

“It’s my pleasure to report for the first time in my new job… that Holden has improved from a loss position of $146 million last year (2006) to an almost break-even position in 2007 with a small $6 million loss – or, to put it another way, about a $140 million turnaround here over the last year,” he said.

Mr Reuss said that excluding restructuring costs of $77.5 million last year, when GM Holden continued its changeover from VZ Commodore derivatives to a full VE Commodore model line-up, the company would have made a pre-tax profit of $27.5 million.

GM Holden blamed its $146 million loss in 2006 mainly on its $1 billion investment in the VE Commodore, 57,300 examples of which were sold in Australia last year – nearly 10,000 more than the number of Falcons sold by Ford Australia – to retain its position as Australia’s top-selling vehicle for the 12th consecutive year, helped by record V8 sales.

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GM Holden boss Mark Reuss
 

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Re: Holden Announces A $6 Million Loss For 2007

With the changeover to the new model that is a lot better than i thought they would. They should be congratulated on their performance.
 

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Re: Holden Announces A $6 Million Loss For 2007

2005 and 2006 ..... they were spending money on the VE.
It damn well SHOULD be a far significant less loss for 2007, when the VE was already released.
 

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Re: Holden Announces A $6 Million Loss For 2007

It's all cyclic, Holden is heading towards profits, Ford will make another loss before it's heads back into the black.

Toyota just starting turning a profit in the last 2 years while for the past 10 years Ford and Holden were far more profitable, yet Toyota will be commended for being healthy, they should be turning a profit on 200,000 + vehicles.
 

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wait until all their investments starts paying off, their Zeta development costs, their Camaro development costs and their engine development costs have now largely been completed.
 

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wait until all their investments starts paying off, their Zeta development costs, their Camaro development costs and their engine development costs have now largely been completed.
If i remember correctly i think GM stuck Holden with hundreds of millions in bills when they delayed the Zeta program for NA which partly cause the big losses they had in 2005-6, with the big downturn in large car sales only a 6 million dollar loss is pretty good, goes to show how good a job they did in taking cost out of making the VE to help limit the loss, lets hope the dollar helps them out a bit with the exports and they can get back to making 100-200 million dollar profits consistently
 

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Yep if they don't make a profit this year, Then i would worry, Well infact if the loss went up i would worry..
Big investment into the VE project, And this is why holden has been slow in making S2 models, Scrap them forever maybe, Only 1 series with running changes for models now.

With fuel on the drop out of nowhere, Rumours are $70 per barrel..
We might see Petrol under $1 again, But lets hope car makers don't go back into there old way, ****, Lets hope we don't.
 

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^^^I thought I had read (a few times) that there wont be a series 2 anymore, but like you said, continue with running changes.

As for the loss, I would be surprised if they really got anywhere substantial this year. They still need to get some serious sales from GMDAT, which of course needs better supply. I know they are selling as well as they can but they are supposed to be generating bigger profits. I don't think Holden is getting what they need in that department but I'm still being patient. Yes, they are making more money per sale, but the amount of cash they would have to have laid out in regard to logistic and administrative support would suck that up pretty quickly. Of course that is going to be another cost when they introduce the new models.
 

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^^^I thought I had read (a few times) that there wont be a series 2 anymore, but like you said, continue with running changes.

As for the loss, I would be surprised if they really got anywhere substantial this year. They still need to get some serious sales from GMDAT, which of course needs better supply. I know they are selling as well as they can but they are supposed to be generating bigger profits. I don't think Holden is getting what they need in that department but I'm still being patient. Yes, they are making more money per sale, but the amount of cash they would have to have laid out in regard to logistic and administrative support would suck that up pretty quickly. Of course that is going to be another cost when they introduce the new models.
Lets hope it's a profit, Even if only 10 mill, As long as it's in the right direction.

New Epica looks better then the past ones, Diesel and 6 speed will help, I would like to see Holden adjust the suspension tune more there way, And then it's a good car for daily driving.

Maybe soon we might see some quality small cars?.

I think that's a GM flaw, They wanted holden to make more money, But they forgot holden was making good money as it was, Now they sent Money Mooney over he in my opinion ****ed up alot of good work, And i believe they enjoyed as i did seeing the back of him.

Wow, that Reuss fellow looks even creepier than LaNeve.
Almost worse then Denny Mooney.
 

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Lets hope it's a profit, Even if only 10 mill, As long as it's in the right direction.

New Epica looks better then the past ones, Diesel and 6 speed will help, I would like to see Holden adjust the suspension tune more there way, And then it's a good car for daily driving.

Maybe soon we might see some quality small cars?.

I think that's a GM flaw,
They wanted holden to make more money, But they forgot holden was making good money as it was, Now they sent Money Mooney over he in my opinion ****ed up alot of good work, And i believe they enjoyed as i did seeing the back of him.
Thats the problem. GM had quality small & medium cars but Aus consumers decided they weren't prepared to pay the money for them. Meanwhile the likes of Hyundai etc serve up more and more crap that seems to sell by the boat load. So, I guess that Holden took the attitude of "If you can't beat them, join them".

Red Hot Mike
 

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Why do people use redesigning cars as an excuse for not making money? Car companies are constantly spending money on redesigning and redevelopping their vehicles. In fact it's much smarter to constantly have something on the design table, instead of doing it all at once (every 5 years, for example). Saying "Oh, the loss doesn't count because they spent so much redesigning a car" doesn't make any sense to me, because it's an integral part of the budget, not a one-time charge that can be explained away.
 

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Why do people use redesigning cars as an excuse for not making money? Car companies are constantly spending money on redesigning and redevelopping their vehicles. In fact it's much smarter to constantly have something on the design table, instead of doing it all at once (every 5 years, for example). Saying "Oh, the loss doesn't count because they spent so much redesigning a car" doesn't make any sense to me, because it's an integral part of the budget, not a one-time charge that can be explained away.
Perhaps the real key is just how much was sent back by Holden to GMNA as a 'dividend' and just how much Holden is 'subsidising/underwriting the G8' into the US!


Mike
 

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Why do people use redesigning cars as an excuse for not making money? Car companies are constantly spending money on redesigning and redevelopping their vehicles. In fact it's much smarter to constantly have something on the design table, instead of doing it all at once (every 5 years, for example). Saying "Oh, the loss doesn't count because they spent so much redesigning a car" doesn't make any sense to me, because it's an integral part of the budget, not a one-time charge that can be explained away.
It definitely counts alright! I'm sure everyone is aware that in their respective industry, a large portion of profits goes to developing the next level. We are developing software at the moment that is conceptually complete and almost ready for beta testing, but we brain stormed yesterday to figure out some additional steps that need to take place before we start selling it. These costs are always on going, whether they be business development, exposure or product development. The trick is to see it as a long term economic value, ie through a five year window (or period defined by your business plan). Looking at a 1 year deficit or profit is great for media reporting because the differences can be easily compared, but it is really a statistic for the short sighted and reactive. Truth be told, much of the result is a product of decisions made many years in the past. Often it is not indicative of an economic future if you don't have visibility to decisions made last week (which in turn are based more on speculative considerations).

None of this softens the blow of a financial loss in the eyes of those who cant see backwards more than 10 minutes and chances are, if they aren't interested in anything more than the headline, they wont recall the story next year either.
 

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Why do people use redesigning cars as an excuse for not making money? Car companies are constantly spending money on redesigning and redevelopping their vehicles. In fact it's much smarter to constantly have something on the design table, instead of doing it all at once (every 5 years, for example). Saying "Oh, the loss doesn't count because they spent so much redesigning a car" doesn't make any sense to me, because it's an integral part of the budget, not a one-time charge that can be explained away.
Put simply, the majority costs are more to do with retooling & new equipment, which only occurs each major platform change (each 8 to 10 years). Most 'design work' would be done continually, in-house where the salaries are the same each & every year.

Dr Terry
 

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Why do people use redesigning cars as an excuse for not making money? Car companies are constantly spending money on redesigning and redevelopping their vehicles. In fact it's much smarter to constantly have something on the design table, instead of doing it all at once (every 5 years, for example). Saying "Oh, the loss doesn't count because they spent so much redesigning a car" doesn't make any sense to me, because it's an integral part of the budget, not a one-time charge that can be explained away.
But Holden is essentially a one platform company, and will write off most capitalised (design, factory design and fitout etc) in the first 2-3 years of a platform's life. You have to remember too, that Holden is probably better off pricing its cars to other GM subsidiaries so that profits are made in the Middle east and US, both of which have lower corporate tax rates than Aus.
 

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Thats the problem. GM had quality small & medium cars but Aus consumers decided they weren't prepared to pay the money for them. Meanwhile the likes of Hyundai etc serve up more and more crap that seems to sell by the boat load. So, I guess that Holden took the attitude of "If you can't beat them, join them".

Red Hot Mike
I just wish they would make there minds up, Go cheap small, Or medium,
I'd like to see them offer a small car with quality, As it's the cheapest way to get into a holden, It's maybe the most important one.
The new Updated version of the epica seems good.

It's hard to believe, for me personally, Hyundai is selling cheap cars that are actually half good today:fall:.
 
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