Victoria’s biggest carmaker, ABM, is now in the middle of a crisis.
This morning, the company announced a $1.9 billion capital injection into its Australia operations.
That’s about $800 million more than was announced yesterday, with a new $700 million loan coming from the Government.
It also announced that ABM will be expanding its plant in Melbourne, adding 3,000 jobs.
But what is this crisis about?
We’re still waiting to hear the results of an investigation by Victoria’s auditor-general, and we can’t wait to see if ABM can find a solution to the crisis.
What is the capital injection?
A $1 billion capital infusion means the company can pay down debt at a much lower rate.
ABM has paid down $1bn of debt over the past two years, and will do so again in the next two years.
The investment will bring the company’s total debt to $1,837 million.
ABB’s parent company, BHP, has also paid down a whopping $1 trillion in debt over five years.
How long will it take?
According to a spokesperson for ABM’s parent, ABB, ABBM has been able to “resolve the challenges and risks that we’ve faced in the last few years”.
“ABM and BHP have the most robust capital management structure in the automotive sector,” the spokesperson said.
“In the coming weeks, we will have more to share about our strategy and plan for the future. “
“While we are committed to continuing to grow our business, we are also confident that we have the capabilities to achieve the success that our shareholders expect. “
“Our commitment to our shareholders is to remain a company of growth, innovation and opportunity, and that’s why we are investing in our business. “
“We will be investing in new technologies and new business areas, and with the assistance of our team, we plan to invest in new manufacturing facilities to deliver more value to our customers, shareholders and the community.” “
The company has been struggling to compete in the lucrative car market. “
We will be investing in new technologies and new business areas, and with the assistance of our team, we plan to invest in new manufacturing facilities to deliver more value to our customers, shareholders and the community.”
The company has been struggling to compete in the lucrative car market.
While it currently has the second largest market share in Australia, it has been hit hard by a combination of bad management, bad pricing and a low quality of life.
The company’s current flagship vehicle, the AB40, is a $10,000 luxury vehicle, but it has struggled to compete with the likes of Mercedes-Benz, BMW and Ford.
What are the main risks facing ABBM?
The biggest risk facing ABB is the high price of its cars, which have become increasingly difficult to sell.
It’s now selling vehicles at a loss, while also having to make up for the higher cost of labour and equipment.
It is also struggling to make a profit.
“With the increase in competition, ABbm’s business is likely to suffer,” the spokesman said.
What does this mean for the company?
If the company has to raise more money to fund its expansion, it will likely take a further hit.
This will also lead to a bigger increase in debt, which could lead to ABBM going under, and the company being forced to sell its assets.
However, it may also allow ABBM to avoid the bankruptcy and tax bills that have plagued the car industry in recent years.