Ford posts $24.9m profit

AS the yards of its Broadmeadows factory threaten to burst with thousands of unwanted Falcons, Ford Australia has announced an after-tax profit of $24.9 million for 2010.

The result, an improvement of $12.7 million over 2009, comes as sales of Ford's locally made flagship have fallen by 40 per cent this year and following the company's decision to slash production by 20 per cent and lay off  240 workers.

This week Carsguide counted some 2000 Falcon sedans and utes worth about $80 million parked at Broadmeadows. The 3880 parking places out of public view are thought to be full.

Only a day after Holden received $40 million from the federal Government toward the development of its next generation Commodore, Ford's chief financial officer Frank Lazzaro confirmed Falcon prediction will be reduced to a record low 209 units per day by mid-July.

Though faced with the pressing problem of where to put their growing stockpile of cars, Ford yesterday presented a positive picture.

While its total sales of 98,941 vehicles in Australia and New Zealand was slightly down on 2009, Ford Australia president and chief executive Bob Graziano said sales profits were higher as a result of a more "varied mix of vehicles in response to customer demand".

Mr Graziano announced improved revenue from continuing operations  $3.3 billion, up from $3.1 billion in 2009; positive cash of $232 million, up from $221 million and reduced intercompany borrowings of $475 million down from $525 million.

He said other income of $116 million was derived primarily from the receipt of ACIS credits, which were linked to production and new vehicle program timings. Ford made investments of more than $307 million across research, development and facilities over the same timeframe, covering a global and local vehicle development programs.

"Despite the changing economic conditions and segmentation challenges the industry faced during the latter half of 2010, Ford has recorded our second straight year of profit and we continue to make the right decisions for our business," Mr Graziano said.

"We are launching the critically acclaimed SZ Territory, have a refreshed Mondeo line-up and we are moving ahead with plans for the all-new Focus and Ranger pickup as well as Falcon EcoLPi and EcoBoost models."

Ford last month released a much delayed diesel version of its Falcon-based Territory SUV which promises much-needed improvements in fuel economy.

Asked if long term production of the Falcon was sustainable, Mr Graziano said Ford was "looking at marketing activity to drive more interest in the product," but has restructured its targets to "current demand and market mix".