Redlion is back in the black

NT News - Motoring - - CARS GUIDE - By PAUL GOVER

HOLDEN is back in the black af­ter five years of losses on its car­mak­ing op­er­a­tions in Aus­tralia.

The red lion brand banked a $112 mil­lion profit on its op­er­a­tions through 2010, re­vers­ing the trend that had built cu­mu­la­tive losses of more than $550 mil­lion since 2005.

The turn­around came as Holden’s par­ent, Gen­eral Mo­tors in the US, also worked to re­cover its long-term prof­itabil­ity af­ter un­sus­tain­able losses that forced it into bank­ruptcy and a mas­sive gov­ern­ment bailout.

The money is staying in Aus­tralia as Holden has not de­clared a div­i­dend and in­tends to spend the profit on fu­ture pro­grams. Al­most all ar­eas of Holden’s busi­ness showed an up­swing through 2010, from new-car sales to ex­ports of en­gines and com­plete cars.

It was also helped by the thirdbest year in sales his­tory in Aus­tralia, which saw the Com­modore con­tinue its 15-year run as the coun­try’s favourite car.

‘‘We’re cer­tainly very pleased to an­nounce a re­turn to prof­itabil­ity. We’re mind­ful, though, that . . . sus­tained busi­ness per­for­mance is the key to Holden’s long-term vi­a­bil­ity,’’ said Holden’s chief fi­nan­cial of­fi­cer, Mark Bernhard.

The profit in 2010 meant a $123 mil­lion turn­around from a $211 mil­lion loss in 2009 that was partly trig­gered by the global fi­nan­cial cri­sis, but was also im­pacted by re­struc­tur­ing costs as Holden cut its work­force from more than 6000 peo­ple to just over 4500. ‘‘The eco­nomic cli­mate ex­pe­ri­enced dur­ing 2008 and 2009 re­quired us to im­prove our struc­tural cost base and busi­ness model to en­sure the longterm prof­itabil­ity of our do­mes­tic busi­ness,’’ Mr Bernhard said. The profit is also less than the $149 mil­lion Holden has re­ceived in Green Car Fund grants from the Fed­eral Gov­ern­ment over the past three years as part of Can­berra’s back­ing for fu­ture in­vest­ment. But Holden trum­pets its spend­ing on ev­ery­thing from Cruze pro­duc­tion to re­search-and-de­vel­op­ment work that will de­liver sig­nif­i­cant econ­omy im­prove­ments to the Com­modore, from E85 ethanol fuel use to a new hi-tech LPG model.

Holden’s to­tal rev­enue in 2010 was $4.4 bil­lion, up from $3.8 bil­lion in 2009.

The good news from lo­cal car mak­ers is ex­pected to con­tinue when Ford re­ports its re­sults in the first week of May, fol­low­ing a bor­der­line $13 mil­lion profit last year. Toy­ota, Aus­tralia’s num­ber one brand, will re­port in July, four months af­ter the end of the Ja­panese fi­nan­cial year, and should also be in the black af­ter a pre-tax profit of $182.3 mil­lion in 2009.

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