Ford Boss: why we won’t kill Falcon early

[Road_Warrior]

There will be a lot of “analysis” type articles in the washup after the media event.

http://smh.drive.com.au/motor-news/f...814-2rv7d.html

Ford says it is giving the Falcon the respect it deserves by giving the car a final spruce before it is put out to pasture in 2016.

Ford’s global president and CEO Alan Mulally told Drive at the brand’s Go Further product showcase this week that he believes the company is doing the right thing by its consumers and its stakeholders by spending millions on the final Falcon.

“I don’t think it’s a negative at all,” says Mulally of the Falcon’s demise.

“We worked really hard to make a viable business here. You know that, it’s a tremendous public-private partnership,” he says of the government-subsidised plants in Victoria. Government money to the tune of $40 million is also being used to develop the Falcon update.

“We’re just not competitive making vehicles in Australia. And so we’re doing the right thing, because any company needs to be able to make a reasonable return to continue to invest in new products.”

Mulally says the reasons are obvious as to why the current Falcon is no longer viable.

“I love the Falcon, I told you I loved the Falcon the first time I met it,” he says. “That market is really, really small. The Australian customers have moved on. The world has moved on. They’re moving to smaller and more efficient vehicles. And that’s exactly what we’re going to provide.”

But when asked why the company wouldn’t just cut its losses on the Falcon and kill it off before the expensive 2014 update, Mulally’s case was clear.

“Because we really want to have an orderly transition. This is a respect for everybody involved, all of the stakeholders.

“That's why we’re refreshing the Falcon, because there’s a lot of people that love the Falcon. And why we’re refreshing the Territory too. And you also heard today that we’re committed to the Territory size and to that market, and so we’ll more to share about that going forward also.

“But absolutely, we’re doing the right thing because of the respect we have for all of the stakeholders, including the employees. But the supply base, the industry, we’re doing absolutely the right thing.”

“We're really pleased with the public-private partnership,” he reiterates. “But everything about the situation, you know.

“This is the most open market in the world, one of the most competitive markets in the world. There are more brands here than anywhere else in the world. There are more models here than anywhere else in the world. This is a really competitive marketplace, and if you’re going to get a chance to participate here, then you need to really, really be competitive,” he says.

Mulally says the brand isn’t going anywhere just because the Falcon and Territory will no longer be produced locally. He put a strong emphasis on the brand’s One Ford policy, which sees global models rolled out into multiple world markets - the Fiesta, Focus and Mondeo are the three passenger cars he mentioned, along with the EcoSport mini SUV, the Kuga small SUV and the new Everest large SUV, which is expected to take the place of the Territory in the company’s lineup at the end of 2016.

“This is a business, and you need to be able to make a reasonable return so you can continue to invest. We looked at our footprint all around the world, and this is the decision we’ve made, and it makes absolute sense. But again, we’re going to continue to serve the Australian customer,” he says.

“The fact is, we are a major presence in Australia, and we serve all the Australian customers. It’s of course a very serious consideration where we decide to make things. But the world is becoming more and more integrated, and the people that are competitive, they have to be competitive, or you don’t get a chance to stay in business and serve the customers. So we’re doing the right thing for the consumer, longer term,” he says.

I reckon the writing is on the wall for the Toreass as well.

Note to Mr Rudd and Mr Abbott: having the most open market in the world is not necessarily a good thing if you want to continue being able to make and grow things here.

[Wretched]

I think his comment below gives more of an insight. Government policy isn't the killer of the Falcon.
While we do have a very open market how much work and investment by FORD (not the government) would it have taken to build other models?
Don't forget they did build Laser here long ago.

“I love the Falcon, I told you I loved the Falcon the first time I met it,” he says. “That market is really, really small. The Australian customers have moved on. The world has moved on. They’re moving to smaller and more efficient vehicles. And that’s exactly what we’re going to provide.”

[stazza]

Meanwhile Holden blames the government.

[Road_Warrior]

Originally Posted by Wretched

I think his comment below gives more of an insight. Government policy isn't the killer of the Falcon.
While we do have a very open market how much work and investment by FORD (not the government) would it have taken to build other models?
Don't forget they did build Laser here long ago.

My comment wasn't Falcon-centric. I think if for argument's sake Ford did a study on building say the Ranger SUV here and another car (pick a car), it would be borderline as to whether it would stack up. For the very reasons Mullaly points out above.

[chevypower]

Originally Posted by Road_Warrior

There will be a lot of “analysis” type articles in the washup after the media event.

http://smh.drive.com.au/motor-news/f...814-2rv7d.html



I reckon the writing is on the wall for the Toreass as well.

Note to Mr Rudd and Mr Abbott: having the most open market in the world is not necessarily a good thing if you want to continue being able to make and grow things here.

What's the point in making things? To make money! (Whether you're the employer or the employee). There's no difference between using taxpayer money to hire people to make products that nobody buys or just paying them the money to sit at home. Actually, the one difference is, paying people to sit at home doesn't waste any resources. Free and open market is the best way to go. People have a greater drive to make money so they get off their *** and do something that benefits the needs of others.

[mik]

Maybe people have moved on , but in my eyes government had a direct hand it, if you drive up the cost of living , there is absolutely no doubt the people will go for the perceived cheaper import models that have flooded the country.

[krypto71]

I wish they would just give us the full range of US vehicles. I think we have more in common with the US market, but we obviously arent big enough to warrant a RHD version of some of the other US vehicles that would be popular here.

[turbodewd]

Originally Posted by mik

Maybe people have moved on , but in my eyes government had a direct hand it, if you drive up the cost of living , there is absolutely no doubt the people will go for the perceived cheaper import models that have flooded the country.

Drive up the cost of living?! Australia's inflation is always between 2-3% which is perfect.

The issue is massive market segmentation. The top 10 sellers combined dont match the top 10 sellers combined from 10yrs ago even though our market is much bigger than then.

[madmelon]

It frustrates me that this situation is so difficult for some people to understand... We're part of this world, not cut off from it. To survive, a business has to either be:

-competitive in this market with the volumes this market supports (Note that includes foreign business and products/services competing in this market)

OR

- competitive on the global market against all competitors, with the volumes that market supports.

The Falcon and Territory (amongst many other Australian products and services) do neither and so are not viable long term. The purpose of a business isn't to make people happy or to win popularity contests. It's purpose is to earn money.

[Kayos]

Originally Posted by madmelon

It frustrates me that this situation is so difficult for some people to understand... We're part of this world, not cut off from it. To survive, a business has to either be:

-competitive in this market with the volumes this market supports (Note that includes foreign business and products/services competing in this market)

OR

- competitive on the global market against all competitors, with the volumes that market supports.

The Falcon and Territory (amongst many other Australian products and services) do neither and so are not viable long term. The purpose of a business isn't to make people happy or to win popularity contests. It's purpose is to earn money.

So in your opinion we are closing production on falcon because??

[GT450]

Originally Posted by Kayos

So in your opinion we are closing production on falcon because??

I thought Madmelon made that perfectly clear, because the Falcon does not sell in enough volume to make a profit and that's waht business is all about.
It's not about being a bad car because it's very very good.
Unfortunately to most , not the members on here, the Falcon has become a dinosaur as people have so much choice , you can only slice the pie into so many pieces.
We should be celebrating the great years we had with Falcon , not denigrating Ford for making a blindingly obious decision. The world is amuch smaller place than it was 40 years ago.
GT450

[GQ_Smooth]

Originally Posted by GT450

I thought Madmelon made that perfectly clear, because the Falcon does not sell in enough volume to make a profit and that's waht business is all about.
It's not about being a bad car because it's very very good.
Unfortunately to most , not the members on here, the Falcon has become a dinosaur as people have so much choice , you can only slice the pie into so many pieces.
We should be celebrating the great years we had with Falcon , not denigrating Ford for making a blindingly obious decision. The world is amuch smaller place than it was 40 years ago.
GT450

Brilliantly put, which lower house seat will you be standing for, as you'll be getting my vote!

[I6DOHC]

Originally Posted by madmelon

It frustrates me that this situation is so difficult for some people to understand... We're part of this world, not cut off from it. To survive, a business has to either be:

-competitive in this market with the volumes this market supports (Note that includes foreign business and products/services competing in this market)

OR

- competitive on the global market against all competitors, with the volumes that market supports.

The Falcon and Territory (amongst many other Australian products and services) do neither and so are not viable long term. The purpose of a business isn't to make people happy or to win popularity contests. It's purpose is to earn money.

I think you are viewing things in the 'perfect world' context. It isn't. It's far from a level playing field the multiple one-sided FTA's are a case in point.

Our governments job is to look after it's own people first, and if that means reciprocating import levies and so forth then that's what they should be doing.

At least we will get to see the 2014 model. Mullaly would look like a fool if they pulled the pin on it now.

[Revolver]

Originally Posted by I6DOHC

I think you are viewing things in the 'perfect world' context. It isn't. It's far from a level playing field the multiple one-sided FTA's are a case in point.

Our governments job is to look after it's own people first, and if that means reciprocating import levies and so forth then that's what they should be doing.

This isnot a narky post, and I know to leave politics out of AFF posts, but who is living in the "perfect world" here?

Tell me the last government that fell on its sword for the good of its people?

I'm 99% sure you won't find one. Each party wants to get in or retain office to keep their power. Governments are just as self absorbed as induviduals. Yes it's their job to look after us, but there are many issues in Australia that can be pointed out that contradicts this premise. Ask the government about them & the will play it down, say they are looking to resolve it then laud "look what we've done over here!"

Mad Mellon is smack on the money.

(Pun not intended)

[Kayos]

Originally Posted by GT450

I thought Madmelon made that perfectly clear, because the Falcon does not sell in enough volume to make a profit and that's waht business is all about.
It's not about being a bad car because it's very very good.
Unfortunately to most , not the members on here, the Falcon has become a dinosaur as people have so much choice , you can only slice the pie into so many pieces.
We should be celebrating the great years we had with Falcon , not denigrating Ford for making a blindingly obious decision. The world is amuch smaller place than it was 40 years ago.
GT450

And I was asking why it didn't sell in his opinion, we know it didn't sell and we know choices are everywhere. Why did, in his opinion, people pull away from the falcon badge. I posted a similar response on carsales regarding business cases vs profit margin. I still think it was a planned death from o/s and the usa needs it's manufacturing for one to hold up and our buzzard governments are followers not leaders still, just my opinion thats what a forum is yes?

[flooded one]

ford has done the right thing as a business if you ask me. don't get me wrong the things i'm upset about is people losing their jobs and the death of the falcon. it cant be helped. giving three years notice is good. I really hope ford do see through here too oct 2016.

[GT450]

Originally Posted by Kayos

And I was asking why it didn't sell in his opinion, we know it didn't sell and we know choices are everywhere. Why did, in his opinion, people pull away from the falcon badge. I posted a similar response on carsales regarding business cases vs profit margin. I still think it was a planned death from o/s and the usa needs it's manufacturing for one to hold up and our buzzard governments are followers not leaders still, just my opinion thats what a forum is yes?

You have been given Kayos the answer but you just don't seem to be able to comprehend it.
GT450

[malazn mafia]

Originally Posted by Road_Warrior

My comment wasn't Falcon-centric. I think if for argument's sake Ford did a study on building say the Ranger SUV here and another car (pick a car), it would be borderline as to whether it would stack up. For the very reasons Mullaly points out above.

Can't Ford look at legalising the Ford 1.0 Ecoboost racer for ADR standards, push them out at a sharp price, put them together with a small team, or maybe even push them out to the World market. Looks simple enough and the target market wouldn't give a damn about climate control, heated seats, radar cruise, etc etc which all add complexity to the car that Ford Aus can't justify...

[Kayos]

Originally Posted by GT450

You have been given Kayos the answer but you just don't seem to be able to comprehend it.
GT450

I asked him why he thinks it didn't sell, given that your so interested anwser that, not why ford pulled it?? 2 different questions comprehend

K

[bobthebilda]

[QUOTE]

Originally Posted by I6DOHC

Our governments job is to look after it's own people first, and if that means reciprocating import levies and so forth then that's what they should be doing.

No, the governments job is to listen to the people, and act accordingly.


http://www.abc.net.au/news/2013-08-1...eficit/4889040

Car industry support
Most Australians do not support giving the ailing car industry any additional taxpayer help.

Whether it be via the way of cash or tariff barriers, the majority of Australians are happy with the way it is, or wish it to be less.

[GT450]

Originally Posted by Kayos

I asked him why he thinks it didn't sell, given that your so interested anwser that, not why ford pulled it?? 2 different questions comprehend

K

It didn't sell because people are now more interested in SUVs and more economical smaller cars , especially families. The Falcon numbers became niche making it hard to justify and to make a loss on every sale would be madness. Oh and Ford pulled it because it didn't sell so it's a viscious circle.

Does that answer your question? It's not exactly rocket science.
GT450

[Kayos]

Originally Posted by GT450

It didn't sell because people are now more interested in SUVs and more economical smaller cars , especially families. The Falcon numbers became niche making it hard to justify and to make a loss on every sale would be madness. Oh and Ford pulled it because it didn't sell so it's a viscious circle.

Does that answer your question? It's not exactly rocket science.
GT450

Hahahah no its not rocket science your opinion is valued.. but the camry and commodore are soooo much smaller and still selling hhmmm the terri is killing in sales but that will be killed, im done.

[mik]

[QUOTE=bobthebilda;4850865]

No, the governments job is to listen to the people, and act accordingly.

yes just like the carbon tax !

http://www.abc.net.au/news/2013-08-1...eficit/4889040



Whether it be via the way of cash or tariff barriers, the majority of Australians are happy with the way it is, or wish it to be less.

Probably true, and Australians have been conditioned that way.

[madmelon]

Originally Posted by Kayos

I asked him why he thinks it didn't sell, given that your so interested anwser that, not why ford pulled it?? 2 different questions comprehend

K

I think the reason for its decline in sales is a far more complex topic but I'll have a stab at identifying a few things that contribute.

Firstly, I think changes in cost of living have contributed. While cars are probably cheaper than ever, a great many other life expenses have drastically increased. In particular, the cost of housing has increased to ridiculous levels. Out-laying such huge proportions of our income on housing, amongst other things, means less to spend on vehicles. So a while a portion of the market actually wants a new Falcon, the most they can afford might be somewhat less.

I think the rise of SUVs really hurt large cars- especially with families and older drivers. In them, you get something that is easier to get into and out of, easier to load things into and take things out of (including children...), has a similar feel of solidity and has the 'commanding driving position'.

'Keeping up with the Joneses' probably contributes as well. No matter how much we want to deny it, the Falcon is not really an aspirational vehicle any more. Even I'm a little bit guilty of this. So many people out there have the attitude 'It's just a Falcon'. My dad for example- could easily afford a top of the range Falcon or something from FPV but chooses a base level C Class Mercedes- 'because it's a Merc'. This is a whole topic on its own but let me just say this: No, the Falcon's interior is not up with many cars in its price range from Japan or Europe and this doesn't help. (Yes, I've had plenty of opportunities to try a range of cars, including the FG.)

Further to the above point, Ford no longer has the image for quality and reliability that it once might have. Toyota has this crown and I suspect they will keep it well into the future. This affects sales of things like Ranger vs Hilux, Focus vs Corolla and Fiesta vs Yaris. Talk to any mechanic- they will almost always recommend a Toyota and almost always recommend you stay away from Ford- and I've heard that from the mouth of Ford mechanics too. I'm sure this wasn't always the case.

Coming to the crux of the issue: Small and light cars. Most people don't need a big car like the Falcon. 10-15 years ago, small and light cars didn't offer much apart from small size and low fuel consumption. Things have changed drastically since then: They pretty much all have 5 star crash ratings, MP3/CD/Bluetooth, power everything, etc. Plus they're typically much more economical, easier to park (and I think this is a rubbish excuse but I do hate driving past parking spaces too small for a Falcon), etc. They're not seen as a compromise any more because they do almost everything the large car does but in a small/light car package.

To a lesser extent, I think a reduction in national pride has had an effect. I don't think anybody cares where a car comes from now (unless it's China).

So that's part of the issues, from what I can see. In my case: I want a new Falcon but I simply can't afford one and if I NEEDED a NEW car, it'd have to be something much smaller.

[XBv8mmm!]

Originally Posted by madmelon

I think the reason for its decline in sales is a far more complex topic but I'll have a stab at identifying a few things that contribute.

Firstly, I think changes in cost of living have contributed. While cars are probably cheaper than ever, a great many other life expenses have drastically increased. In particular, the cost of housing has increased to ridiculous levels. Out-laying such huge proportions of our income on housing, amongst other things, means less to spend on vehicles. So a while a portion of the market actually wants a new Falcon, the most they can afford might be somewhat less.

I think the rise of SUVs really hurt large cars- especially with families and older drivers. In them, you get something that is easier to get into and out of, easier to load things into and take things out of (including children...), has a similar feel of solidity and has the 'commanding driving position'.

'Keeping up with the Joneses' probably contributes as well. No matter how much we want to deny it, the Falcon is not really an aspirational vehicle any more. Even I'm a little bit guilty of this. So many people out there have the attitude 'It's just a Falcon'. My dad for example- could easily afford a top of the range Falcon or something from FPV but chooses a base level C Class Mercedes- 'because it's a Merc'. This is a whole topic on its own but let me just say this: No, the Falcon's interior is not up with many cars in its price range from Japan or Europe and this doesn't help. (Yes, I've had plenty of opportunities to try a range of cars, including the FG.)

Further to the above point, Ford no longer has the image for quality and reliability that it once might have. Toyota has this crown and I suspect they will keep it well into the future. This affects sales of things like Ranger vs Hilux, Focus vs Corolla and Fiesta vs Yaris. Talk to any mechanic- they will almost always recommend a Toyota and almost always recommend you stay away from Ford- and I've heard that from the mouth of Ford mechanics too. I'm sure this wasn't always the case.

Coming to the crux of the issue: Small and light cars. Most people don't need a big car like the Falcon. 10-15 years ago, small and light cars didn't offer much apart from small size and low fuel consumption. Things have changed drastically since then: They pretty much all have 5 star crash ratings, MP3/CD/Bluetooth, power everything, etc. Plus they're typically much more economical, easier to park (and I think this is a rubbish excuse but I do hate driving past parking spaces too small for a Falcon), etc. They're not seen as a compromise any more because they do almost everything the large car does but in a small/light car package.

To a lesser extent, I think a reduction in national pride has had an effect. I don't think anybody cares where a car comes from now (unless it's China).

So that's part of the issues, from what I can see. In my case: I want a new Falcon but I simply can't afford one and if I NEEDED a NEW car, it'd have to be something much smaller.

Thank you for the post.

I agree with all that you have said, especially the lack of pride in Aussie product.
Still, I will be spending a large chunk of my hard earn'ds on an FH XR8 and enjoying it for as long as possible.

I'll miss Falcon when it's gone.

[Kayos]

Originally Posted by madmelon

I think the reason for its decline in sales is a far more complex topic but I'll have a stab at identifying a few things that contribute.

Firstly, I think changes in cost of living have contributed. While cars are probably cheaper than ever, a great many other life expenses have drastically increased. In particular, the cost of housing has increased to ridiculous levels. Out-laying such huge proportions of our income on housing, amongst other things, means less to spend on vehicles. So a while a portion of the market actually wants a new Falcon, the most they can afford might be somewhat less.

I think the rise of SUVs really hurt large cars- especially with families and older drivers. In them, you get something that is easier to get into and out of, easier to load things into and take things out of (including children...), has a similar feel of solidity and has the 'commanding driving position'.

'Keeping up with the Joneses' probably contributes as well. No matter how much we want to deny it, the Falcon is not really an aspirational vehicle any more. Even I'm a little bit guilty of this. So many people out there have the attitude 'It's just a Falcon'. My dad for example- could easily afford a top of the range Falcon or something from FPV but chooses a base level C Class Mercedes- 'because it's a Merc'. This is a whole topic on its own but let me just say this: No, the Falcon's interior is not up with many cars in its price range from Japan or Europe and this doesn't help. (Yes, I've had plenty of opportunities to try a range of cars, including the FG.)

Further to the above point, Ford no longer has the image for quality and reliability that it once might have. Toyota has this crown and I suspect they will keep it well into the future. This affects sales of things like Ranger vs Hilux, Focus vs Corolla and Fiesta vs Yaris. Talk to any mechanic- they will almost always recommend a Toyota and almost always recommend you stay away from Ford- and I've heard that from the mouth of Ford mechanics too. I'm sure this wasn't always the case.

Coming to the crux of the issue: Small and light cars. Most people don't need a big car like the Falcon. 10-15 years ago, small and light cars didn't offer much apart from small size and low fuel consumption. Things have changed drastically since then: They pretty much all have 5 star crash ratings, MP3/CD/Bluetooth, power everything, etc. Plus they're typically much more economical, easier to park (and I think this is a rubbish excuse but I do hate driving past parking spaces too small for a Falcon), etc. They're not seen as a compromise any more because they do almost everything the large car does but in a small/light car package.

To a lesser extent, I think a reduction in national pride has had an effect. I don't think anybody cares where a car comes from now (unless it's China).

So that's part of the issues, from what I can see. In my case: I want a new Falcon but I simply can't afford one and if I NEEDED a NEW car, it'd have to be something much smaller.

I'd have to agree with most of what you said, good to see your on the same page..it's not just the profit margin.
Unfortunatly you didn't raise the lack of marketing for FG across tha range or any at all. Interior on Falcon doesn't use the best product correct.
And additionally from what I've seen & heard, the toyota's aren't that reliable anymore but are better at it than Ford/Holden and the cars are simple not quite cheaper to repair compared, and the big ole fuel case per 100 which everyone falls for.
Euros are a joke and I know why.. unless you drop 120k plus
The falcon and I say large sedans from ford are gone come 2016, I doubt Ford u.s will find a business case big enough to bring the taurus or fusion, yep they'll only bring a mondeo as it's ready rhd and the people will live with it, I will unfortunatly have to live with what we get/have... FG/FH GT/Muzzy next and beyond I'd say SRT but dependant on many things

[Moby Vic]

Originally Posted by krypto71

I wish they would just give us the full range of US vehicles. I think we have more in common with the US market, but we obviously arent big enough to warrant a RHD version of some of the other US vehicles that would be popular here.

You want to add Mustang and Taurus? You're getting Mustang before Falcon dies, and Taurus isn't selling that well here and seems to be more hated than Churchill in Australia based on its name alone. I hear the new Explorer is a blast to drive, but it is either FWD or FWD-biased AWD—I doubt it would be preferred over Territory.

Ford of Europe has been wagging the corporate dog since at least 2008. You'll get whatever is sold in the UK because RHD versions already exist.

[NX74205]

Originally Posted by Kayos

The falcon and I say large sedans from ford are gone come 2016, I doubt Ford u.s will find a business case big enough to bring the taurus or fusion, yep they'll only bring a mondeo as it's ready rhd and the people will live with it,

Fusion = Mondeo sedan

[Kayos]

Originally Posted by NX74205

Fusion = Mondeo sedan

hahaha my bad, mondeo will stay mondeo, and doubt fusion name will come at all.. taurus name makes me bonkers!!!

[janddbone]

Dont know why people go on about size.. Falcon size has barely changed in decades and everything else is bigger and bigger with each new model... The size thing is all in the head.