Toyota posts $437m loss due to Australian factory closure

Posted on 27 Jun 2014 by Tim Brown

Toyota Australia’s decision to end its manufacturing operation in the country has resulted in a AUD$437m loss after tax — its biggest annual financial loss to date.

Toyota’s loss of AUD$437m, from a turnover of AUD$8.4bn, was the company’s fourth year-end loss in the past five years, bringing its total losses to AUD$578m.

Toyota President Dave Buttner said: “There were too many external factors beyond our control that made it unsustainable to continue building cars and engines in Australia in the mid to long term future,” he said.

“This has obviously had a significant impact on our results as our focus is now on supporting our employees and ensuring that we have the correct provisions in place as we transition to a national sales and distribution company.”

The company said the cost to shut its Altona factory, in south-west Melbourne, will amount to $889 million, including $505 million in asset write downs and $384 million for employee redundancies.

Toyota Australia employs 3900 people, and 2500 positions are expected to be cut as it moves out of manufacturing.

According to the two other car companies that will also be ceasing manufacturing work in australia, Holden and Ford, had also been making consistent losses. Holden made an annual average profit of $273m from 2000 to 2005 but lost an average of $120m over each of the past nine years from an average annual turnover of $5.06 billion. Ford has reported an average annual loss of $41m over the past 14 years from an average annual turnover of $3.03bn.

The car maker received $71m of assistance from the Australian government in the Japanese financial year, which ends in March. Over the past 13 years, Toyota Australia has accepted about $1.3 billion in taxpayer assistance, which is marginally more than Ford ($1.2bn) and significantly less than Holden ($2.1bn) over the same period — even though Toyota employs more factory workers, builds more cars and exports more vehicles than both Holden and Ford.