Ford to shut down plants in July, shed jobs

[BroadyFord]

Ford Australia to stand down workers in July

http://www.goauto.com.au/mellor/mell...257A1C0000C06E


FORD will consider longer-term job cuts after confirming this morning that it will shut the doors on its Victorian manufacturing plants in Broadmeadows and Geelong for a week in July.

The temporary closure – from Friday, July 6 – comes as the company battles plummeting sales of its locally built Falcon large car, which have dropped a further 25.2 per cent this year, with just 1008 units sold in May, despite the introduction of a new four-cylinder variant.

Ford Australia public affairs director Sinead Phipps told GoAuto this morning that the company was looking for ways to match its production levels with market demand, and that a “down balance” of production lines – a corporate way of saying job cuts – was one possible alternative.

“As we talked about with the union last week, we are looking at a number of ways in which we can manage our production,” she said.

“We’re currently managing that by implementing down days, but we’re looking at other potential alternatives, one of which would be a potential down balance, but we have not made any decision at this stage.”

Ms Phipps said another possibility was to place more emphasis on the production of the Falcon-based Territory SUV, sales of which are up a substantial 57.4 per cent year-to-date following the introduction of a popular diesel variant early last year.

“That (upping Territory production) is actually a slightly tricky thing to implement in terms of production down the line, but it’s one of the things we are looking at,” she said.

The confirmation of stand-downs comes just one month after Ford Australia announced an after-tax loss of $290 million for the 2011 financial year – its largest ever – much of which stemmed from a one-off tax impairment charge of $212 million.

Falcon sedan has long been the staple of the Blue Oval in Australia, but was outsold in May by its imported Fiesta, Focus and Ranger stablemates, despite the introduction of the turbocharged four-cylinder EcoBoost variant in April.

As we reported at the EcoBoost launch, Ford Australia projected sales volumes of around 250 units per month for the four-cylinder variant for the rest of this year, before increasing its targets from next year.

Sales of the gas-powered EcoLPi Falcon have also been lower than anticipated since that car’s launch in April 2011, with Ford battling supply issues on several key parts, particularly gas tanks provided by APV Automotive Components, which was placed in the hands of receivers in April.

Ford was forced to stand down 1800 staff for six days in April following the collapse of key Victorian-based suspension parts supplier CMI. The receiver of CMI announced the lay-off of 44 workers in May.

Ford Australia president and CEO Bob Graziano defended Falcon sales in April, telling GoAuto that the company has shifted away from its traditional focus on fleet sales and was putting more emphasis on the more profitable private sector.

Ford Australia announced a $103 million investment in local manufacturing in January this year, including contributions from the Victorian and federal governments, which will see Falcon and Territory production continue until at least 2016.

The company has not announced plans for its local operations beyond this point, although reports suggest the Falcon could be replaced with a global large car such as the Taurus or Fusion/Mondeo, in line with the Blue Oval’s ‘One Ford’ strategy of streamlining its global portfolio.

Ford Australia announced earlier this week the closure of its Ford Heritage Centre in Geelong at the end of July after 13 years of operation.

[falconator]

What can you say the landscape is changing!Came home the other night in a taxi Fairlane, the cabbie owner/ operator is updating to a Toyota.Sad : (

[anto]

this was all over the morning news shows as well, which is doing nothing to help in terms of PR.

the drum beats are getting louder...sadly

[BENT_8]

Judging by the figures i'd say Ford well and truely missed the boat by not slipping a diesel version into the lineup, especially with the gas tank supply issues.

As much as i would hate to see the demise of the Falcon, you'd have to be blind not to see the writing on the walls.

[TC200six]

More negative headlines about Ford Oz. I now see it appear on the Sky News Facebook page. How can Ford keep battling with continuous negative press leading the public to think the Falcon is dead already?

[dimka100]

Ford Australia needs to start releasing some positive news as the recent run of consistently bad news is killing the Falcon faster than ever ... many people at work are already considering the Falcon dead just from reading the usual SMH news and such, they are not Ford or any particular car fans, but are just common working people ...

The reality is if all people hear is bad news in the media they will automatically avoid the brand when shopping for their next car regardless of how good the actual product is.

[GT 160]

Death by a thousand cuts

[P6LTD351]

Oh dear. I'm sick of all this negativity. You are right though, people will steer clear of the Falcon if they continue to hear stories like this. Ford, get some balls and re-release the 'have you driven a Ford....lately?' campaign and shove it down people's throats.

[Chilliman]

Ford really need to getting their marketing/PR machine into gear. All these negative stories about the Falcon will eventually impact on the rest of the range. I wonder how many people will hear that 'Falcon is finished' and then not even bother to go near a Ford dealer to check out a Focus, Mondeo or Kuga when making their next vehicle purchase?

[jpd80]

And by making these changes Ford is controlling costs and keeping manufacturing going by not making more than it can sell.
I hope they look at boosting Territory Production, that seems to be the smartest and most positive strategy to come out of this...

[Wretched]

Originally Posted by TC200six

More negative headlines about Ford Oz. I now see it appear on the Sky News Facebook page. How can Ford keep battling with continuous negative press leading the public to think the Falcon is dead already?

The figures don't lie, it doesn't look good any way you look at it.
Ford are the only ones who can spin the positive publicity.

[Whitey-AMG]

Focus , Ranger and Terry Diesel is where its at for Ford - sadly only 1 is made here locally.

Plenty of empty space at Broady coming up methinks- they can put the Defunct Geelong FORD discovery centre in there ..........

[jpd80]

In a recent book released by Bryce Hoffman on the recovery of Ford in America,
he was given unfetted access to Ford senior personnel and anecdotal stories
on the promise that those person's identities not be revealed.

One startling area was the way vehicle programs were assessed, managers would over estimate
sales projections, Ford would actually lie to itself to get programs through.
This was common practice through out Ford NA and the rest of the Ford global regions.

One of the big changes under Mulally was "no more lying", a product has to have sufficient
sales potential and a good rate of Income otherwise it will not be funded.

Production is not all about Falcon, it now bares far more on the success of Territory - maximizing sales is vital.

At the moment, Ford has adjusted Falcon sedan and Territory to a 1:1 production mix
but I'm betting that may go to three Territorys to every two Falcon sedans as the
buyer emphasis changes more to SUVs and away from large sedans.

I hope this opens Ford's eyes to other potential Territory models that might bring sales,
2WD XR6 or XR6 Turbo Territory?, Ecoboost I-4 RWd Territory?, 2.2 I-4 diesel Territory as a base model?

I'm sure the imagination could go wild with other variations with potential sales..

[BENT_8]

More negative press...who do you think told them that they were closing down for a week...

Ford only have themselves to blame in all of this, for too long they have dictated to their customers what they could and couldnt have and its all coming home to bite them.

Now, more than ever before the buying public want more choice from their purchases be it cars or whatever, to expect people to buy certain products to get what they want is alienating their market.

If Joe bloggs wants a RWD wagon to fit the family in and tow his tinny to his holiday destination, he has to have a Territory or look elsewhere.
If Joe bloggs wants a RWD diesel for efficiency, he has to have a territory or look elsewhere.
If Joe Bloggs wants a RWD V8 he has to buy an FPV or look elsewhere.
But if Joe want a Focus, no probs, we can do that. We just wont pay to manufacture it here.

All of that may suit the one eyed blue oval buyer, but does nothing to entice average Joe who just wants what he wants.

The EB4, whilst great on paper, will struggle to attract the private buyers it is intended for.
Infact making a vehicle to rival a segment already flooded with cheap off shore options is ridiculous.

Personally, i believe Ford has lost its identity in Australia.
Its not sure if it wants to be a rival for Hyundai and sell 4cyl cars, or Toyota and sell SUV's.

One things for sure, it certainly is no rival for Holden who sell large RWD cars with a choice of 6 or 8cyl engines, wagon, ute and sedans in a number of equipment levels and makes no excuses for doing it...all from a company which cant make money apparently.

[jpd80]

Originally Posted by BENT_8

One things for sure, it certainly is no rival for Holden who sell large RWD cars with a choice of 6 or 8cyl engines, wagon, ute and sedans in a number of equipment levels and makes no excuses for doing it...all from a company which cant make money apparently.

And for all of that, Holden scored exactly 1500 more sedan and S/W sales than Falcon,
when you consider that Territory sales at around 1300, that is equivalent to those other sales.
(This is relevant to local production assessment, regardless of whether Holden imports/sells Captiva)

Both companies have suffered large reductions recently but those are coming mainly
from fleet sales which normally have much lower margins, something back up in recent statements..

So like it or not, the core sales of Ford is still rather good but unlike Holden,
Ford hasn't substituted Focus production for lost Falcon sales where as
Holden
now produces Cruze as a way of improving production with modest income (They don't build em for a loss).

One other thing, only Ford knows the real cost of providing this model or that model
and if they choose not to do it, you can bet the rate of return is that low, it's not worth it.

[Road_Warrior]

Originally Posted by Wretched

Ford are the only ones who can spin the positive publicity.

And there it is.

The negativity has been allowed to perpetuate for too long and Ford have sat silent all along.

[csv8]

Were do I send the flowers ? I will have a JD's tonight and toast the Falcon...

[jpd80]

So hypothetically, Ford keeps selling 1000 off Falcons along with say, 500-600 Utes,
but starts selling 1500-1800 Territorys does that mean we wave the white Flag?

Not on your life.

[BENT_8]

Originally Posted by jpd80

One other thing, only Ford knows the real cost of providing this model or that model
and if they choose not to do it, you can bet the rate of return is that low, it's not worth it.

Or, it could be just an excuse to force down peoples throats what they want.

There is no doubt Holden have used the Cruze to maintain sales in order to keep people in jobs. The recent sales figures underline this and make it a worthy addition.
Ford too have maintained their market share with the Territory, and good on them for doing it.

The problem Ford has is that its locally made options are cannibilising each other, Territory has simply taken Falcon buyers who want extra load carrying capabilities.
The Cruze isnt an option for someone who wants an SS, a Cruze and an SS ute can and do live side by side in many suburban garages within average Joes budget.

Having a Focus next to your Falcon/Terry in your driveway does nothing for local jobs.

At the end of the day do we want Ford to stay to keep jobs, or so we dont end up with imported Falcons.
If its the former then Ford should have gone ahead with local Focus production to maintain a healthy balance. If its the latter, your all in for a rude awakening.

[jpd80]

Originally Posted by BENT_8

Or, it could be just an excuse to force down peoples throats what they want.

No one is "forcing" anyone to do anything, the amount of choice on the market says buyers go elsewhere regardle

There is no doubt Holden have used the Cruze to maintain sales in order to keep people in jobs. The recent sales figures underline this and make it a worthy addition.
Ford too have maintained their market share with the Territory, and good on them for doing it.

I am annoyed that Ford didn't consider the Forcus in that cancellation was based on
out of date data on production mix, current sales are more biased towards Trend and Titanium.
Maybe Mondeo/Fusion would be a worthwhile addition if only to eliminate frustration with supply delays

The problem Ford has is that its locally made options are cannibilising each other, Territory has simply taken Falcon buyers who want extra load carrying capabilities.
The Cruze isnt an option for someone who wants an SS, a Cruze and an SS ute can and do live side by side in many suburban garages within average Joes budget.

Turn that around, people want more than a big sedan, they want something
that's more versatile and gives better seating position in the traffic, a big plus with women. (not a big plus sized woman, LOL)

Having a Focus next to your Falcon/Terry in your driveway does nothing for local jobs.

It gives FoA income, something they need, something thay can use to Fund further Falcon development.

At the end of the day do we want Ford to stay to keep jobs, or so we dont end up with imported Falcons.
If its the former then Ford should have gone ahead with local Focus production to maintain a healthy balance. If its the latter, your all in for a rude awakening.

Ford will build the falcon for as long as the market keeps wanting it, 2014 update is proof of that.
Territory is the vehicle that enables that to happen.

[dimka100]

What will happen to the Territory if the existing 2.7ltr diesel stops being manufactured in favor for the 3.0ltr unit? I thought the 2.7ltr does not really have much life left in it in the overseas markets?

[Road_Warrior]

Well, if Ford grew some brains and started making it in the Geelong plant to account for the gradual draw down of the I6, this base would be covered and they could probably find some more applications for it, nudge nudge, wink wink.

But in any event, Ford own the design, IP rights and manufacturing rights for the entire Lion engine family (which includes the 3.0TDCi V6, a 3.6TDCi V8 and a 4.4TDCi V8) so they could simply access the Ford global parts bin for the 3.0 motor if the 2.7 becomes available. Which would also tie in nicely with a model update for the Territory.

[dimka100]

So who is currently manufacturing the 2.7ltr diesel for the Territory? I know the Disco and Jags still have them, are they all supplied by Ford EU?

[Road_Warrior]

They are manufactured by Ford's Dagenham Engine Operations.

[Nikked]

Insert typical AFF negative statment here....

[b0son]

Originally Posted by jpd80

And by making these changes Ford is controlling costs and keeping manufacturing going by not making more than it can sell.

Every time production is scaled down, overheads as a % of each car goes up and profit goes down. There's only so much more production time they can cut back before its just not worth making.

[Buntz]

How do you expect to sell a car you don't advertise you managerial morons? Give me a job, I have passion for ford's locally made product.

[JPFS1]

Originally Posted by b0son

Every time production is scaled down, overheads as a % of each car goes up and profit goes down. There's only so much more production time they can cut back before its just not worth making.

They're lucky they've got a hedge in place.

The downturn in their local manufacturing is propped up financially by the lead R&D role they have for the whole of FAPA.

FoA are not partners to the other Ford regions as many may think to be case, rather they should be considered consultants and get paid to do the work.

Now on anther note, considering the Broadmeadows plant was only recently retooled (FG) which now conforms to FoE manufacturing standards, what opportunities that may bring?

[Buntz]

Originally Posted by JPFS1

They're lucky they've got a hedge in place.

The downturn in their local manufacturing is propped up financially by the lead R&D role they have for the whole of FAPA.

FoA are not partners to the other Ford regions as many may think to be case, rather they should be considered consultants and get paid to do the work.

Now on anther note, considering the Broadmeadows plant was only recently retooled (FG) which now conforms to FoE manufacturing standards, what opportunities that may bring?

Transit? Mondeo? C-Max? B-Max? Something they can't get enough of here, or want to introduce?

....

Mondeo?

[Scott]

I'd like to think shut downs are more to do with Union negotiations than outright necessity.