Finance Work Mercedes-Benz, Ford to keep JobKeeper millions, despite healthy profits

Mercedes-Benz, Ford to keep JobKeeper millions, despite healthy profits

mercedes jobkeeper
Mercedes-Benz's Australian arm posted strong results in 2020, despite the pandemic. Photo: Facebook/Mercedes-Benz Australia
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Luxury car maker Mercedes-Benz pocketed almost $5 million in emergency JobKeeper payments, despite staying profitable during the COVID-19 economic shock and boasting of a “strong” year.

Financial statements filed by Mercedes-Benz’s parent company, Daimler Australia Pacific, show it recorded a $62.7 million profit in Australia  in 2020, compared with a $25 million loss in 2019.

“Despite the impacts of the global pandemic on the world economy, the group delivered a strong result,” the company’s 2020 financial report says.

Daimler’s revenue was bolstered by $4.9 million in JobKeeper payments between April and September, putting the company among a growing list of businesses that collected the wage subsidy while posting profits.

It did not respond to questions about how it qualified for JobKeeper under the scheme’s rules, which required companies with a turnover above $1 billion to demonstrate or forecast a fall in income of at least 50 per cent during certain periods of 2020.

“The company qualified for important assistance as part of the federal government’s broader stimulus initiatives following the outbreak of COVID-19 in Australia and the subsequent economic downturn,” Daimler said in a statement.

“This support, as intended, meant we could retain our local workforce and continue serving our customers and supporting our local retail network.”

The financial statements also show Daimler transferred $1.3 million in dividends to its German parent company in 2020.

mercedes jobkeeper
Mercedes-Benz said the JobKeeper payments enabled it to keep its local workforce. Photo: Getty

The JobKeeper scheme, which ended in March, was designed to keep Australians in jobs during the height of the pandemic by subsidising wages for employers experiencing falling revenues.

Yet many companies – including some major players in the automotive sector – have seen a windfall from the payment.

US car maker Ford received $38 million in JobKeeper in 2020, while also posting a $59 million profit in what it described as a “solid result” in its 2020 financial statements.

However, Ford says it would have recorded a loss without the JobKeeper revenue and the proceeds of the sale of its decommissioned Geelong factory.

“Ford Australia’s focus in 2020 was, and continues to be, keeping its large team of engineers, designers, and auto specialists in jobs, and JobKeeper payments helped the company to achieve that goal during the tough months of 2020,” it said in a statement.

“For these reasons, we do not plan to repay JobKeeper.”

In January, Japanese car maker Toyota announced it would hand back the $18 million in JobKeeper it received after its financial position improved in the second half of 2020.

Other major car makers, including Honda, General Motors and Nissan, are yet to file their financial statements for 2020.

Labor MP Andrew Leigh has called on companies that remained profitable while on JobKeeper to return the funding to the government.

“From car dealers to multinational manufacturers, JobKeeper has gone to firms that saw their profits rise during the pandemic,” he said.

“While Australians were losing their jobs and wages were stuck in the slow lane, car makers and auto dealers were screeching off into the sunset with millions of dollars of taxpayer subsidies in the boot.”

When contacted for comment, Treasurer Josh Frydenberg’s office pointed the ABC to his previous comments on the issue.

In January, Mr Frydenberg told the ABC’s Insiders program that the government would not require companies that remained profitable to return the money, but he would “welcome any business that decided to pay that money back”.

There’s is no central register of companies that have received JobKeeper, so it is unclear exactly how much of the stimulus money flowed to the automotive sector.

However, some major players in the sector that are listed on the Australian Securities Exchange have revealed they earned JobKeeper while still in the black in 2020.

Australia’s biggest car dealership, Eagers Automotive, received $133 million from JobKeeper while also recording a profit of $156 million in 2020. It paid $64.2 million in dividends to shareholders.

Four-wheel-drive accessories company ARB collected $9.8 million in JobKeeper while staying profitable in 2020.

Both companies have ruled out repaying JobKeeper.