Ford rejected export help: Wikileaks

[Wretched]

Leaked cable shows no high-level interest in exporting Falcon and Territory.

Ford Australia refused government support to help it build the locally made Falcon and Territory for export, raising questions about its survival, a leaked diplomatic cable reveals.

The cable, released last week by Wikileaks, reveal that the Melbourne-based car maker had declined the help of Federal Industry Minister Kim Carr, who offered ''co-investment opportunities to create left-hand-drive cars for export''.

''[Senator] Carr is very worried about Ford's future in Australia. He told [the Consul-General's office] Melbourne he fears Ford will not succeed in attracting the necessary investment to update its aging product lines,'' the cable, signed off by former Melbourne-based US Consul-General Michael Thurston, says.
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The cable, dated December 16, 2009, went on to reveal that separate talks with Ford's management ''provided us a different perspective of its future — it sees itself very much as part of Ford's global business and would be willing to make sacrifices for the good of the greater company''.

Speculation is already rife that Ford Australia is considering dumping the rear-drive Falcon when a new version is due in about 2014 or 2015 in favour of a US-made, front-wheel-drive Taurus sedan, potentially signalling the end of the locally made large car's five-decade production run.

Rumours also persist that the next-generation Falcon could share its underpinnings with the Ford Mustang performance car as the US-based company expands its One Ford policy of migrating new vehicles to a single global platform.

''By contrast, Holden views its Australian operation more as a standalone subsidiary,'' the cable says.

The cable reveals the US Consulate in Australia kept a keen interest in Holden's performance, and even learned that the Australian division of US car-making giant General Motors saw itself evolving as a niche player rather than a significant presence in world markets.

''Although Senator Carr would clearly like to see the three automotive manufacturers increase their export volumes, Holden plans to focus increasingly on the Australian market,'' it says.

''[Former Holden managing director] Alan Batey acknowledged a tension between Senator Carr's desire for greater exports and Holden's plans to focus more on the Australian domestic market.

''Batey believes, however, that Holden can best play to its strengths by focusing on niche exports such as providing police vehicles and high-end muscle cars to the US market.''

Before the 2008 global financial crisis, exports accounted for more than half of Holden's annual production.

However, the closure of the US export program and the winding down of its Middle East sales has hit its Elizabeth assembly line hard.

When the US export program was at its height, Holden shipped 36,500 rebadged Commodores to the US in a single year — about two-thirds of the company's total exports and almost a third of its total vehicle production.
The cable goes on to paint a more gloomy picture of Australia's car manufacturing future.

''Despite optimism from Australia's three automotive producers and a commitment by the Rudd government to support the industry until at least 2021, Australia's automotive manufacturing sector will likely continue to slim down in coming years,'' it says.

''There is a growing debate in Australia about what constitutes manufacturing versus assembling as discussions with Carr, Batey and [former Ford Australia managing director Marin] Burela have shown.

''Ford and Holden are moving toward increasingly assembling vehicles in Australia rather than manufacturing them in the traditional sense.

''While none of the three remaining manufacturers are looking to exit Australia now, all three envision slimmer operations, fewer employees and a focus on niche markets.''

A Ford spokesperson was unavailable for comment.

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