Finance Finance News Holden loss to hit parts makers: economist

Holden loss to hit parts makers: economist

Holden facing closure costs as 2017 approaches.
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An economic analyst says it is no surprise Holden has posted a big loss in its latest financial report as it approaches the end of Australian manufacturing.

Holden’s net loss is nearly $554 million for the 2013 year.

It recorded a one-off impairment charge on property, plant and equipment of just over $500 million and paid more than $122 million in employee separation costs.

Adelaide University economist John Spoehr says such costs will continue for the carmaker.

“We’ll see more losses to come as they have to pay out another 2,500 employees nationally,” he said.

“Part of what we’re hearing from Holden might resonate in the wider components sector with the write-down of their assets.

“If some of the components suppliers are under pressure from the banks they may well be forced to close down, unless Holden provide those components suppliers with strong support and the banks are patient.”

Holden says total revenue of more than $4 billion and a rise in car sales late in the year was not enough to offset costs of impending closure of local operations.

Holden has announced its Australian manufacturing will end in 2017.