Ford may have survived with Focus: Carr

[mik]

Originally Posted by GQ_Smooth

1) What kind of annual volume do you think make local production viable?
2) How much profit do you believe Ford/Holden/Toyota make selling a locally made car to a government department?

While some won't agree with me, I believe it will only be viable if we make imported competition cheaper, this policy has it's own long term issues.

Someone might be able to answer this, but I think it varies with manufacturer and the amount of driveline manufactured here, I'm thinking a car with more cheaper made imported parts that arrives on our shores in knocked down arrangement might be cheaper to build a car up than locals that have the majority of stuff made here for a small fortune.
Not forgeting a conventional layout car has more moving parts , ie falcon/commodore vs aurion front wheel drive.

[Kieron]

Originally Posted by GT-spec15

There's two interests here, and quite obviously they were competing.

1. That building the Focus here would be good for Australia
2. That building the Focus in Thailand would be better for FORD

Spot on mate and Ford will do what is best for Ford in times of trouble just as its up to the Aust. govt. to do whats best for Aust - that's what we pay them to do.

[mik]

Originally Posted by Ducati888

If it were made here, the Focus would need to also be exported as LHD. That's the only way it could be viable, just as the Camry is.

Is the Aussie made Cruze exported as well?

Here's somthing I don't understand. The three Aussie based manufacturers have taken billions over the years to remain in business here. Why has the Federal government not mandated to all other levels of government that the local industry has been funded, and therefore must supply all fleet cars at half price, or a price viable to ensure value to the taxpayer for the billions that the Feds and state governments have tipped in?

Why would they give away so much money and then not ensure that fleets consist of those very same cars? They must have used the same lawyers to draft the contracts as those who did the Myki contract or the Victorian Desalination plant. Give everything away and get nothing in return. I wish those lawyers would lose their jobs, houses and families.

There should also be extra tax breaks to private fleets operating locally made products.

Finally, a mirroring of the import duties to the countries that we import from seems fair to me. If Thailand has a 15% import duty, then we should impose 15% on anything we get from that country. If Japan is 10% then we should impose a 10% import duty on them. If Europe is 5% then 5% for them. I think you get the picture.

That, to me, is a level playing field. You can't get any more level than that. Some argue against protectionism. I ask why it's bad to look after your own.

I'd rather foreign families starve than those here.

Why don't we look after our own?

Yes I have two Aussie made cars. My next one will probably be the last Territory off the production line.

as far as the funds go , maybe i`m dead wrong , but i think the government knows the motor industry puts way more back into the economy than what it takes out , i read somewhere for every dollar the car companies receive as a "handout" they put six into the economy, and i think manufacturing already gets a good reaming via taxes etc by govco.
Ducati888 i absolutely agree on the mirroring of the subsidies , it is after all only fair, the problem is you need people in government that have some Kaaahoneys to fight for our rights, all we have is a bunch of pussies.

[burnz]

Originally Posted by mike_nofx

So Australians should work for $5 then?

Seriously, I doubt you could even raise a family, pay a mortgage and buy a new car on $25 an hour.

By the way, do you make more, or less than $25 per hour?

agree, you cant get out of bed for anything less than 20p/h.

the cost of living is around 18p/h.

[rdmr]

Originally Posted by Kieron

Spot on mate and Ford will do what is best for Ford in times of trouble just as its up to the Aust. govt. to do whats best for Aust - that's what we pay them to do.

The Aust govt does what is best for Australia!?
When was that??

[rdmr]

Kim Carr was a great minister. One that knew the importance of manufacturing in this country.
I'll pass on a story I was told. A story that I believe was true.
Kim Carr was working on another plan to save Ford Australia just that little bit more, and it involved the Aussie I6.
On his desk, was a plan to export the Geelong built LPi I6 to china. To the tune of 200+ a day. It was ready to be done.
But then Kevin Rudd wanted another crack at being prime minister, and minister Carr backed him. Rudd backed out and Carr lost his job by J Gillard. And the plan like everything else on his desk was thrown out.
Another what if now.

[GT-spec15]

Wow that's interesting if true.

[XR6TCraig]

Originally Posted by Samurai_Chris

Why pay an Aussie $25p/h, when you can pay a Thai $5?

If you want to blame someone, blame the unions.....

They milk industry until it bursts, but where are they now?

I cant see how this is relevant or accurate. Its easy to say but that doesn't make it right!

Generally, big business here in recent years has made record profits. You only need to look at the banks to see this. Yet you are saying the unions are bleeding them dry? Something doesn't add up clearly!

Workers work longer and harder than they ever have in Australia for no more money in relative terms, housing and the cost of living is dearer than its ever been relative to what we get paid, yet you say its the unions that are stuffing things up?

Do you only make $5 an hour or have those pesky unions made sure you get more than that? Would you be happy trying to pay off the average Australian mortgage earning that kind of coin?

We live in a country where making $5 an hour would mean you would have to sleep under a bridge at night. You certainly couldn't afford to feed yourself, cloth yourself and provide shelter for yourself and your family.

Our cost of living in this country warrants higher wages to survive. Blame the unions all you want but its nowhere near as simplistic as that. Government and big business all have there greedy little fingers in this pie.

Now we could live on $5 an hour if houses only cost $35K to buy, rates were $250 a year and the average weekly household food bill was $50, but its not and you cant just blame unions solely for all of those things being the price that they are!

But lets say we have a big adjustment going forward. Assuming you own or are paying off a house would you be comfortable having it devalued to $35K so that aussies earning only $5 an hour could afford to purchase one like it, or is house ownership only to be enjoyed by shareholders, business owners and government officials?

[FormulaFG]

I'm going to buck the trend and say the Focus wouldn't have helped Ford. It may have delayed the inevitable a little while longer, but not much.

You have to think about the market it would have been up against. Toyota Corolla, Mazda 2/3, Mitsubishi Lancer etc..... and you know what, the Aussie made Focus would have cost more, purely because of the labour cost.

The only way the Focus, and for that matter the Cruze, would/will have any chance is if we re-introduce some sort of tariff to make things fair. Simply building the focus here is pointless without the protection.

[Brazen]

Originally Posted by FormulaFG

I'm going to buck the trend and say the Focus wouldn't have helped Ford. It may have delayed the inevitable a little while longer, but not much.

You have to think about the market it would have been up against. Toyota Corolla, Mazda 2/3, Mitsubishi Lancer etc..... and you know what, the Aussie made Focus would have cost more, purely because of the labour cost.

The only way the Focus, and for that matter the Cruze, would/will have any chance is if we re-introduce some sort of tariff to make things fair. Simply building the focus here is pointless without the protection.

Labour cost is about 3%-5% of the cost of making a car, and you still have to pay the Thai workforce - they are not working for free, and the Australian workforce is more efficient. Plus the car makers in Thailand have to pay for medical costs of staff and their family. Really labour costs differences between the two countries are insignificant in highly complex and mechanised manufacturing, the biggest issue is economies of scale.

[janddbone]

Costs are to high to make things here, period...

[Brazen]

Even Bob Graziano stated on the 7.30 report was the lack of scale was the issue with Ford Australia, it simply needed to build more cars.

Interesting article I found related to building a car (Australian car makers are lucky in that they don't pay pensions or medical costs like other countries).

http://www.forbes.com/2005/12/22/chr...1227flint.html

The greatest cost in building a car isn't the steel, the plastic or copper. Nor is the great cost the wages paid to the workersthe pensions for all those retired workers or the medical costs that's we've heard so much about.

The biggest nut for an automobile manufacturer is the cost of the factory, the tooling and the machinery.Property taxes for the plant, the overhead for headquarters and energy bills are also part of this cost structure.

Such costs are all fixed. The factory is built, and the machinery bought, the chief executive is paid no matter what, and those taxes don't stop. This overhead is part of the price of every vehicle built in the plant. If the plant builds 200,000 cars in a year, those costs per car are smaller than if the plant builds 150,000. If the factory can get up to 300,000, then those costs per unit are even smaller.

[mik]

I`ll bet energy costs over the pond are nothing like ours, last time i mentioned our power bill in a thread i didnt look at the bill properly, it was 500 odd with the cut, without the cut it would have been $$$700 odd .........holy hook up that generator to my bike batman !
a few years ago it was less than half that i`m sure, water bill up, rates ..... up, wages up???
materials up, transport up.

[jpd80]

Focus manufacturing contract in Australia was conditional on FoA closing down Geelong engine and casting
and buying V6 engines off Ford USA. So basically, FoA had to surrender its very affordable engine for buying
an alternative off the USA, it's a form of legal monetary transfer to another country.

Perhaps that would have left FoA vulnerable to external forces and make Falcon more expensive internally?
As with most things in life, there was no guarantee that Focus built in Australia would add a dime to profitability,
especially when the government was only going to put in $30 million towards the project, the start up costs
on small volume would surely cripple it.

Marin Burela saw right through it.

[prydey]

Originally Posted by mike_nofx

So Australians should work for $5 then?

Seriously, I doubt you could even raise a family, pay a mortgage and buy a new car on $25 an hour.

By the way, do you make more, or less than $25 per hour?

no, australians shouldn't work for $5/hr, but they shouldn't expect $25/hr for unskilled labour, but too many industries (with push from unions working 'for the people') have a high percentage of people who are largely unskilled, and earning a very large pay packet.

people take this for granted. they think its their right to be able to afford a big house, 5 tv's, a new car or 2, have annual holidays etc etc, and anything less is considered unfair or discriminatory.

[GT-spec15]

There is a massive sense of entitlement culture in Australia.

[prydey]

Originally Posted by Brazen

Local Focus production was estimated at about 40,000 a year which was made up of 25,000 sales a year domestically (only 2000 a month) - Australia is the biggest market for Focus in the region, with 15,000 exported a year to other ASEAN countries. I actually think local Focus would have sold over 30,000 a year (2500 a month) domestically easy.

It was also widely tipped that Kuga would be built here on the Focus line - they share platform and parts and that would have been another 30,000 a year or so. Australia is tipped to be the biggest market for Kuga in the region.

With Falcon, ute and Territory you could be looking at 100,000 units a year from the plant - three times better economies of scale of current plant.

focus doesn't sell 2000/month so how would building it locally attract those extra sales? esp given the price would probably be more.

to me, focus sales have more than justified ford's decision. also, its not just ford's opinion that it wouldn't work. toyota don't build corolla here because they can't make the sums work and they are also puzzled at how holden can do it and be viable.

i would suggest that holden aren't making money on cruze.

[Bossxr8]

Graziano said in our Q&A session the other day that Focus volume wouldn't have even gone close to giving FoA enough volume to keep the place profitable. Even at close to plant capacity our costs are still a lot higher than mega factories overseas pumping out hundreds of thousands of cars a year, because we don't have the scale they do. We just can't compete with such old factories.

There have been a heap of these mega factories built over the last decade or 2 and they can produce in such a large scale that costs per vehicle are so low.

[Smoke Pursuit]

Originally Posted by prydey

no, australians shouldn't work for $5/hr, but they shouldn't expect $25/hr for unskilled labour, but too many industries (with push from unions working 'for the people') have a high percentage of people who are largely unskilled, and earning a very large pay packet.

people take this for granted. they think its their right to be able to afford a big house, 5 tv's, a new car or 2, have annual holidays etc etc, and anything less is considered unfair or discriminatory.

I agree to some extent but the problem is there's a shortage of unskilled labour. At one end of the spectrum you have people who don't and won't work because we have a reasonable social security system and they don't see the value in working for $10 an hour and at the other end you have low skilled people getting jobs in the mines earning way more then they are worth. So with this you have to pay unskilled workers $25 an hour or you won't get them motivated to come to work.

[Lotte]

Originally Posted by XR6TCraig

Workers work longer and harder than they ever have in Australia for no more money in relative terms, housing and the cost of living is dearer than its ever been relative to what we get paid, yet you say its the unions that are stuffing things up?

Do you only make $5 an hour or have those pesky unions made sure you get more than that? Would you be happy trying to pay off the average Australian mortgage earning that kind of coin?

Don't forget fighting for annual leave, penalty rates (including casual penalty rates) and public holiday pay.

[Smoke Pursuit]

Originally Posted by prydey

focus doesn't sell 2000/month so how would building it locally attract those extra sales? esp given the price would probably be more.

to me, focus sales have more than justified ford's decision. also, its not just ford's opinion that it wouldn't work. toyota don't build corolla here because they can't make the sums work and they are also puzzled at how holden can do it and be viable.

i would suggest that holden aren't making money on cruze.

Focus supply is still an issue. They could sell more if they had more supply. Especially with 2.9 finance.

The only car worthwhile building here would have been Ranger and the 6 speed auto. They need another auto gearbox factory.

[GT-spec15]

Originally Posted by Bossxr8

Graziano said in our Q&A session the other day that Focus volume wouldn't have even gone close to giving FoA enough volume to keep the place profitable. Even at close to plant capacity our costs are still a lot higher than mega factories overseas pumping out hundreds of thousands of cars a year, because we don't have the scale they do. We just can't compete with such old factories.

There have been a heap of these mega factories built over the last decade or 2 and they can produce in such a large scale that costs per vehicle are so low.

Thanks for your information.

Further confirmation that it's ridiculous to flap our arms and pick out certain things to 'blame' for this. It's a range of issues.

[Crazy Dazz]

Originally Posted by TMC

Focus wouldn't have been exported to Thailand as they have a no import policy on cars. Ford chose to build them there for access to the Thai market

Utter Tripe

Originally Posted by Samurai_Chris

Why pay an Aussie $25p/h, when you can pay a Thai $5?

If you want to blame someone, blame the unions.....

and how much do YOU earn ******?
If you’re prepared to work for $5 an hour come on over, I have plenty of work for you.

And WHO exactly is this “Kim Carr” anyway? Oh that's right, he was an integral part of the government that sodomised the Australia Economy.

Because obviously if you can’t make money out of two uniquely Australia Cars occupying Niche markets, the logical thing to do is to start making a model in THE most hotly contested market segment, where all your competitors are landing their cars at one quarter the cost from Asia. Wow, with such great business acumen its hrad to believe the Labour party could stuff things up so badly.

A Focus Ute? You need to understand that smoking crack causes Brain Damage.

[mik]

Originally Posted by prydey

focus doesn't sell 2000/month so how would building it locally attract those extra sales? esp given the price would probably be more.

to me, focus sales have more than justified ford's decision. also, its not just ford's opinion that it wouldn't work. toyota don't build corolla here because they can't make the sums work and they are also puzzled at how holden can do it and be viable.

i would suggest that holden aren't making money on cruze.

I had that suspicion too Rob, I was thinking holden may have been on borrowed time aswell, but keeping mum on how hard up they actually might be

[FPV GTHO]

Originally Posted by jpd80

Focus manufacturing contract in Australia was conditional on FoA closing down Geelong engine and casting
and buying V6 engines off Ford USA. So basically, FoA had to surrender its very affordable engine for buying
an alternative off the USA, it's a form of legal monetary transfer to another country.

Perhaps that would have left FoA vulnerable to external forces and make Falcon more expensive internally?
As with most things in life, there was no guarantee that Focus built in Australia would add a dime to profitability,
especially when the government was only going to put in $30 million towards the project, the start up costs
on small volume would surely cripple it.

Marin Burela saw right through it.

Who's to say as well implementing local Focus production wasn't going to require a similar investment to what Holden Cruze and Mitsubishi 380 cost to get to local production from a global platform - about $600m a piece.

[jpd80]

Originally Posted by FPV GTHO

Who's to say as well implementing local Focus production wasn't going to require a similar investment to what Holden Cruze and Mitsubishi 380 cost to get to local production from a global platform - about $600m a piece.

Exactly what I was getting at, the cost of bringing a global Focus to Australia in such small volume was not worth it,
Thailand has far greater access to other Asian markets and is mostly exempt from neighbor's import taxes,
something Australia could never compete with.

[SpoolMan]

To late for the blame game whats done is done, Fords future in Australia will rest only on imports after 201#.
Supply is an issue now on some models and variants, our Ford dealers future is going to be solely dependent on imports and with more models coming to the line up in 201#, Dealers must be praying the supply issues become a problem of the past.
Australia is a small market compared to some Countries but if the brand wants to grow here in Oz with the new upcoming models the vehicles need to be sitting on the showroom floors.

8 to 12 month wait on a Ranger Wildtrak in a competitive market isn't a good look for the brand or its customers, Focus has supply issues with some variants at stages also.

[Lukeyson]

Wonder if Ford had of got an additional $1b over the last 10 years in govt support what kind of position FoA would be in with local production?

[GQ_Smooth]

I feel like a ***** arguing against local production, but looking at it objectively, it's economic sense with the only risk being civil unrest (very real in some Asian countries).

I can't see supply issues being fixed at all. The joys of living in Australia (small market, *** end of the world, unique design requirements), importers in all industries have these issues. If a product is new and successful overseas, it will be very hard to get a production run for us, when the factory can just keep churning them out for Europe and US.

[Ducati888]

Originally Posted by GT-spec15
There's two interests here, and quite obviously they were competing.

1. That building the Focus here would be good for Australia
2. That building the Focus in Thailand would be better for FORD

Option 3: It's more than that. It's better for Ford and for Thailand. There would be huge "incentives" given to auto makers by the Thai government to set up shop there. Those kind of payments wouldn't be written in any contract, but there's no way that we could compete here. Think corruption and money in brown paper bags.

The other thing is - as far as labour costs go, Thai factories may pay medical benefits, but they pay 9% Super in Australia. I wonder which one is more expensive?