Ford Australia manufacturing not dead

[BroadyFord]

http://www.carsguide.com.au/news-and...ring_not_dead/

Ford Australia’s troubled manufacturing operations may not be doomed after all.

Contrary to widespread speculation from parts suppliers and industry analysts, Ford has not made a decision to close the Broadmeadows and Geelong factories after 2016.

This is the first time a senior Ford executive has indicated there is still a chance for the struggling Australian manufacturing operations.

But the future remains unclear as Ford keeps its plans secret. Ford’s newly appointed chief operating officer Mark Field told News Limited at the Los Angeles Motor Show overnight that a decision to close the factories has not been made.

“We’ve made the investments in Broadmeadows that take us to 2016, and we’re in the process of looking at our plans and understanding what we can do going forward,” Fields said.
“That’s all we can share at this point. Beyond 2016, in the next couple of years we’ve got to make those decisions because of the [manufacturing] lead times.”

When asked specifically if Ford had made a decision to shutter or retain the local factories, Fields answered “no”. Some suppliers believe there is no future for Ford Australia’s manufacturing operations beyond 2016 because they are yet to be asked to pitch for contract work.

But Ford says vehicle development times are getting shorter, which means it has until 2014 before it needs to lock-in suppliers. Raj Nair, Ford’s group vice president in charge of global product development, told News Limited: “There’s nothing firm, as in ‘this is the year we’re out or this is the year we need to make a decision’. It’s a constant evolution of a discussion.

“Clearly [Australia] is a tough environment and the actions we need to take to maintain competitiveness will always be a focus for us. But right now it’s full steam ahead with the work we’ve got going for Ford Australia, including the product line-up we want to offer.”

Ford has had seven straight years of sales decline in Australia, demand for the Falcon is at record lows and Broadmeadows is on track to produce its lowest annual output ever, just 33,000 cars.

All this as Australia is about to post all-time-high new-car sales of close to 1.1 million. But Nair says there are other factories in the Ford world that produce fewer than 33,000 cars a year.

“I don’t have a specific number, but we do have factories that are lower than that,” Nair told News Limited, adding that low output alone was not a reason to close a factory.

“It’s a matter of matching capacity to demand and running it as efficiently as you can,” he said. “We don’t get into specific details of viability of any specific factories. [But] we always balance the advantage of local production with importing on every product.”

It has been widely speculated that, eventually, the Falcon sedan and Territory SUV will be replaced by their North American cousins – the Taurus and Explorer – because it would be cheaper to import these models than produce similar cars locally.

But Ford has not confirmed that -- or what else it might build at Broadmeadows beyond 2016. In 2007, Ford announced it would build the Focus small car in Australia alongside the Falcon and Territory.

But it axed those plans two years later, almost to the day, and shifted production to Thailand, a low-wage country that has a free trade agreement with Australia. The only other vehicle markets in Australia that could support the volumes required for local manufacturing are pick-ups and SUVs.

Ford had also considered building the Ranger ute and its seven-seater SUV sibling in Australia. But after thorough analysis Nair said building the Ranger in Thailand instead of Australia “absolutely made sense, just as it made sense to put the [four-cylinder] Ecoboost engine in the Falcon”.

When asked what other cars Ford Australia could build in lieu of the Falcon and Territory, Nair said: “We’re not going to give any hints about connecting the dots on our [product] cycle plan [but] Australia is an important engineering centre and manufacturing centre”.

In January this year Ford Australia announced it would invest $103 million to update the Falcon and Territory in 2014, after receiving $34 million from the Federal Government and an undisclosed amount from the Victorian Government (believed to be $19 million) to keep its Broadmeadows and Geelong operations running until the end of 2016.

But the taxpayer assistance didn't extend to job guarantees. Ford has had two redundancy programs over the past two years, axing 330 factory-worker jobs earlier this month and 240 in April 2011.

[Nikked]

Well duh...


Just need to convince all the "experts" on here (and in the media) that think otherwise.

[Dr Smith]

Well it seems the international Ford execs handled these questions perfectly and gave reasonable answers when anything more is just giving the game away too early. Kudo's to Messers Mark Field and Raj Nair.

PS. Wonder which Ford plants are at the same or lower production run as that part of Nair's reply was excellent?

[Buntz]

All this as Australia is about to post all-time-high new-car sales of close to 1.1 million. But Nair says there are other factories in the Ford world that produce fewer than 33,000 cars a year.

“I don’t have a specific number, but we do have factories that are lower than that,” Nair told News Limited, adding that low output alone was not a reason to close a factory.

“It’s a matter of matching capacity to demand and running it as efficiently as you can,” he said. “We don’t get into specific details of viability of any specific factories. [But] we always balance the advantage of local production with importing on every product.”

And this is why no imported product could ever take away the Falcon. It's never made sense. FoA have always engineered continuity into the car, and this has always mound it a sound business case. You could even call the car integrated.

I do however believe that a turning point will be reached, where they will decide to spend the money to replace it, or spend the money to send it to other markets. Whatever the decision, it will need some cash to be stumped up.

[Bossxr8]

Were they seriously expecting him just to blurt out "yeah, we're shutting it all up sometime after 2016, but just don't tell anyone".

What do they expect him to say. Why do these dumb journos make stupid stories about nothing. Its not even worth writing an article about because if the decision hasn't even been made yet then why do they expect to have an answer now?

Its like me saying Ford will shut their Detroit global hq and move it to Moe in 2018, and its quite possible because they haven't made a decision yet which means it very may well happen.

But then again would anyone expect quality journalism from Carsguide?

[Fiesta_Man69]

It just says that a decision hasn't been made. It's a non story. A vote of confidence in Aussie manufacturing would be to confirm that Ford will be manufacturing - not just "no decision has been made." Carsguide obviously enjoyed pointing out Fords record low numbers....

[Mr Brooksy]

Originally Posted by Bossxr8

Were they seriously expecting him just to blurt out "yeah, we're shutting it all up sometime after 2016, but just don't tell anyone".

What do they expect him to say. Why do these dumb journos make stupid stories about nothing. Its not even worth writing an article about because if the decision hasn't even been made yet then why do they expect to have an answer now?

Its like me saying Ford will shut their Detroit global hq and move it to Moe in 2018, and its quite possible because they haven't made a decision yet which means it very may well happen.

But then again would anyone expect quality journalism from Carsguide?

It maybe a pointless piece but at the very least it is not a Ford is dead piece of rubbish that is the flavour of the century.

I say, "even though it doesn't say much at all, at least its not another pointless doom and gloom piece from the Holden media company".

[Bossxr8]

I think it was solely written to highlight Fords poor sales figures. They love regurgitating it over and over.

[Luke Plaizier]

That was a positive article to me. Thankyou.

However, and it irks me, what I also read in that article is that the Australian Government signing the FTA with Thailand is what caused Ford Australia to lose the option to produce Focus, Ranger AND Ranger-based-SUV. The case for free market exchanges with underhanded countries like Thailand that jack up non-tariff taxes to protect themselves while running off with the spoils of the FTA jackpot make the whole idea of FTA with other countries laughable. They talk about never bringing back Tariffs, but at least in those days Australia had a healthy manufacturing base. This FTA way of doing things has very little in the way of positive news for public consumption. The high dollar and award wage law is certainly never going to let us export on equal terms even with countries that don't have other secret agendas when it comes to FTA highway robbery.

Thank you knucklehead FTA signers. Please come and claim your free punch to the throat......


Lukeyson

[XRtowcar]

Start making Ranger here and it will keep Broady going for years.

[Nikked]

They key factor is this.


If Ford were to shutdown operations, it would be 2014, or already.


But hey, people still believe that they are going to shut down a operation that is being upgraded, invested and constantly used...

All along it was the media alone that started this, first they assumed that the falcon would be a Taurus buy now, and when that didn't happen, they assume a shut down.

All wrong, totally wrong.


But, when Holden threaten to shut up, and Ford haven't, thats amusing...

[nstg8a]

Especially when ford has already shown in Europe that its not afraid to make the hard call and shut down plants. And when it does do it, there's no beating around the bush, dragging it out for years.

Wham bam shut the doors.

Media has been dribbling about the end of the falcon since Noah was a boy.

[SpoolMan]

Some sort of production at Broadmeadows HQ what ever it may be will always be better than zero.
The speculation has been centered around the Falcon disappearing and not Ford.
Problem as I see it people look at the Falcon like its the Ford Motor Company.

Originally Posted by XRtowcar

Start making Ranger here and it will keep Broady going for years.

How good would that be, the dealers cant keep with demand and customers are willing to pay full retail, this vehicle is the bread and butter for a lot of dealerships now when they can get them.
Ranger developed and engineered in Australia, shows we have the people to engineer world class vehicles, only problem its being built elsewhere.

[nstg8a]

Originally Posted by SpoolMan

Some sort of production at Broadmeadows HQ what ever it may be will always be better than zero.
The speculation has been centered around the Falcon disappearing and not Ford.
Problem as I see it people look at the Falcon like its the Ford Motor Company.

Focus and or ranger would be only real option to build here, to sell in sufficient quantities to make it worth setting up.
Given there both built in more financially attractive countries than here its not surprising some see it as no falcon = no local manufacturing.

Luckily we won't have to find out anytime soon.

Of course export plans for whatever is built here would change things significantly.

[Buntz]

Originally Posted by Bossxr8

Were they seriously expecting him just to blurt out "yeah, we're shutting it all up sometime after 2016, but just don't tell anyone".

What do they expect him to say. Why do these dumb journos make stupid stories about nothing. Its not even worth writing an article about because if the decision hasn't even been made yet then why do they expect to have an answer now?

Its like me saying Ford will shut their Detroit global hq and move it to Moe in 2018, and its quite possible because they haven't made a decision yet which means it very may well happen.

But then again would anyone expect quality journalism from Carsguide?

Have faith Boss. I know you work there and you've seen nothing but hard times for the company, but Ford is still there, and still committed for four more year AT LEAST. And don't forget that Raj Nair was quoted in the article as saying that the production numbers don't really matter, they have plants making less cars than that. As long as it is efficient and viable to the numbers, and makes money.

Originally Posted by nstg8a

Especially when ford has already shown in Europe that its not afraid to make the hard call and shut down plants. And when it does do it, there's no beating around the bush, dragging it out for years.

Wham bam shut the doors.

Media has been dribbling about the end of the falcon since Noah was a boy.

THIS. Exactly. The battle ground may be Europe, but don't think for a second anywhere is safe in Ford's ongoing global restructuring. Genk, a plant we thought would be a staple of Ford forever... was just entirely made redundant. Blam!

So for Ford to dilly dally around Broadmedows and Geelong, does show that it has some viability to the Company. Otherwise it would be just a design and test facility already.

[JG34JA]

Originally Posted by Luke Plaizier

That was a positive article to me. Thankyou.

However, and it irks me, what I also read in that article is that the Australian Government signing the FTA with Thailand is what caused Ford Australia to lose the option to produce Focus, Ranger AND Ranger-based-SUV. The case for free market exchanges with underhanded countries like Thailand that jack up non-tariff taxes to protect themselves while running off with the spoils of the FTA jackpot make the whole idea of FTA with other countries laughable. They talk about never bringing back Tariffs, but at least in those days Australia had a healthy manufacturing base. This FTA way of doing things has very little in the way of positive news for public consumption. The high dollar and award wage law is certainly never going to let us export on equal terms even with countries that don't have other secret agendas when it comes to FTA highway robbery.

Thank you knucklehead FTA signers. Please come and claim your free punch to the throat......


Lukeyson

It would seem the setup of the FTA has snookered our manufacturing industry. FOA even designed the Ranger, there is a great demand in this country for 4x4 utes/dual cab utes, our environment and vast distances/outback kind of dictate we should be good at this kind of thing. Instead, every vehicle built for this landscape is imported! Is it that we demand 5 star safety in locally built vehicles and that kind of ute has never achieved this, until Ranger? Economist Paul Krugman's New Trade Theory's Home Market effect "states that, ceteris paribus, the country with the larger demand for a good shall, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it." - yet we don't. I can think of Argentina producing the Amarok as one example where this is working.

[Ducati888]

Originally Posted by Bossxr8

I think it was solely written to highlight Fords poor sales figures. They love regurgitating it over and over.

Ford doesn't have poor sales figures. It's the fourth biggest passenger car brand in Australia.

Falcon and Territory have poor sales figures. There is a clear distinction between the two.

[Ducati888]

Originally Posted by JG34JA

It would seem the setup of the FTA has snookered our manufacturing industry. FOA even designed the Ranger, there is a great demand in this country for 4x4 utes/dual cab utes, our environment and vast distances/outback kind of dictate we should be good at this kind of thing. Instead, every vehicle built for this landscape is imported! Is it that we demand 5 star safety in locally built vehicles and that kind of ute has never achieved this, until Ranger? Economist Paul Krugman's New Trade Theory's Home Market effect "states that, ceteris paribus, the country with the larger demand for a good shall, at equilibrium, produce a more than proportionate share of that good and be a net exporter of it." - yet we don't. I can think of Argentina producing the Amarok as one example where this is working.

Australia has never mass produced a utility that wasn't based on a passenger car first. All of the 4X4 & 4X2 utilities in thier modern guise were produced by America first (F100, Bronco, etc) and then made better in Japan.

America has similar conditions to Australia and is populated throughout. Australia has a few people around the edges and none in the middle. There's no market here compared to that of the USA. Having said that, the rise in popularity of these vehicles has come about as they have become more usable for a family. They are nearly all 4 door cabs now, with leather and air con. Tradie vehicles during the week and family vehicles on the weekend. The vehicles have developed in to what people want, not the other way around.

It's funny that you mention Amarok. The image driven ute. I'm with the Emergency Services in Vic. Recently, all SES units were told to get rid of all their 4X4 dual cab utilities unless they are new Ranger or BT50s. This is because the rear suspension is not rated for the load we put in them, the front bars are not rated for the power winches, the vehicle balance is out front to rear when loaded and carrying crew, and we can travel with no more than 4 people because they exceed GVM with five and a full complement of the gear we need. The front vs rear balance is the biggest issue.

The list includes all the popular brands - Triton, Hilux, Amarok, Navara (we are working with Nissan on a solution). Colorado is not yet tested or rated.

In order of suitability, Amorok is bottom of the heap. Ford and Mazda at the top. Colorado is yet to be tested but should fare OK. Next is Navara, then Triton. then Hilux.

Ford could be on to a good thing here if they can supply. 5 Cylinder only though please.

[Smoke Pursuit]

Originally Posted by Nikked

They key factor is this.


If Ford were to shutdown operations, it would be 2014, or already.


But hey, people still believe that they are going to shut down a operation that is being upgraded, invested and constantly used...

All along it was the media alone that started this, first they assumed that the falcon would be a Taurus buy now, and when that didn't happen, they assume a shut down.

All wrong, totally wrong.


But, when Holden threaten to shut up, and Ford haven't, thats amusing...

Why would they shut now or 14?? They can build cars till 2016.... They have already designed an update for FG, why waste it now? Even if they don't sell stacks of cars they are better off repaying the R & D on what they already have now then walking away and losing their entire investment, or whats left to repay on it.

I am hopeful they can do something after 2016, but as we know Australia isn't a great place to manufacture with the high cost of labour, poor export incentives and so on. No point building cars based on government handouts either, all that does is promotes a false economy.

[Smoke Pursuit]

Originally Posted by Ducati888

Ford doesn't have poor sales figures. It's the fourth biggest passenger car brand in Australia.

Falcon and Territory have poor sales figures. There is a clear distinction between the two.

Territory is doing well.... Lack of supply hurts it at times but overall its doing better in its segment then Falcon... But then again Falcon is still number 2 in its segment..... Sadly the large car segment is down.

[turbodewd]

Originally Posted by Ducati888

Ford doesn't have poor sales figures. It's the fourth biggest passenger car brand in Australia.

Falcon and Territory have poor sales figures. There is a clear distinction between the two.

Right, so the Falcon outsells the Liberty, Maxima, Mazda6, Aurion...and those cars have great sales figures? Oh, wait, we should be harping on every month about the Liberty and Maxima sales figures are so shtt?!?

Your statement is stupid and is not fact-based.

The Territory has made the top 10 in sales a few times this year.

[Fiesta_Man69]

Originally Posted by turbodewd

Right, so the Falcon outsells the Liberty, Maxima, Mazda6, Aurion...and those cars have great sales figures? Oh, wait, we should be harping on every month about the Liberty and Maxima sales figures are so shtt?!?

Your statement is stupid and is not fact-based.

The Territory has made the top 10 in sales a few times this year you drongo.

So the Falcon sales figures are satisfactory? Really?

The Liberty and Maxima aren't the Falcons rivals: the Camry, 3, Commodore, Territory (and other SUVs) are. Aussies who used to buy the Falcon are now buying these.

Industry experts and journalists (all who are much more qualified than anyone on this forum to comment irrespective of how much you wish to deride them) have consistently said the Falcons numbers as they are now are unsustainable in the long term (which is why the EB Falcon must get picked up by fleets).

[Drizz06]

Originally Posted by turbodewd

Right, so the Falcon outsells the Liberty, Maxima, Mazda6, Aurion...and those cars have great sales figures? Oh, wait, we should be harping on every month about the Liberty and Maxima sales figures are so shtt?!?

Your statement is stupid and is not fact-based.

The Territory has made the top 10 in sales a few times this year you drongo.

I suggest you re-read what he posted.
I don't think I will bother reading the pub threads anymore
It's just to embarrassing reading ford fans bag ford all day and talk about there failures over and over again.

[Smoke Pursuit]

Originally Posted by Fiesta_Man69

So the Falcon sales figures are satisfactory? Really?

The Liberty and Maxima aren't the Falcons rivals: the Camry, 3, Commodore, Territory (and other SUVs) are. Aussies who used to buy the Falcon are now buying these.

Industry experts and journalists (all who are much more qualified than anyone on this forum to comment irrespective of how much you wish to deride them) have consistently said the Falcons numbers as they are now are unsustainable in the long term (which is why the EB Falcon must get picked up by fleets).

If we had exports the Falcon would be sustainable... Obviously in the long term future it wont be just supplying Australia... If it can share a platform with say the Mustang, as well as motors / gearbox then perhaps, but with one Ford this just won't fit. I am hopeful they can still build something from the 1 Ford line up here, but it has to be exported otherwise its just not going to be feasible.

[I6DOHC]

Originally Posted by Luke Plaizier

That was a positive article to me. Thankyou.

However, and it irks me, what I also read in that article is that the Australian Government signing the FTA with Thailand is what caused Ford Australia to lose the option to produce Focus, Ranger AND Ranger-based-SUV. The case for free market exchanges with underhanded countries like Thailand that jack up non-tariff taxes to protect themselves while running off with the spoils of the FTA jackpot make the whole idea of FTA with other countries laughable. They talk about never bringing back Tariffs, but at least in those days Australia had a healthy manufacturing base. This FTA way of doing things has very little in the way of positive news for public consumption. The high dollar and award wage law is certainly never going to let us export on equal terms even with countries that don't have other secret agendas when it comes to FTA highway robbery.

Thank you knucklehead FTA signers. Please come and claim your free punch to the throat......


Lukeyson

+1^

It only seems to me that with all of these FTA agreements Australia ends up being the patsy, while the other countries invent ways to prevent us being able to export on level terms. Then mugs like Hockey smugly spout our manufacturers need to become more competitive. wtf? How about governments be held accountable for their decisions, like everyone else has to be for theirs. And before anyone says "that's why we vote"...it can all be too little too late once the damage has been done (eg Qld health payroll system)

Anyway well said Lukeyson....100% agree with everything you've put forward.

Also great article and good to hear positive (or non negative) stuff coming from Ford HQ.

[Joe5619]

Originally Posted by Fiesta_Man69

The Liberty and Maxima aren't the Falcons rivals: the Camry, 3, Commodore, Territory (and other SUVs) are.

The Liberty & Maxima arn't Falcon rivals, yet the Mazda 3 is?? How did you come up with that thinking??

[P6LTD351]

You know what? I'm looking at my old car magazines of the early eighties. It was touted back then that the XF Falcon would be the last Australian made Falcon.

This has been going on for over 30 years.

The Falcon is not dead. Get used it.

[Smoke Pursuit]

Originally Posted by eb2monty

You know what? I'm looking at my old car magazines of the early eighties. It was touted back then that the XF Falcon would be the last Australian made Falcon.

This has been going on for over 30 years.

The Falcon is not dead. Get used it.

I remember the media when the EF First came out... Last Falcon to be built... Your right nothings changed except people buy alot less of them then they did back then.

[xe351]

you know what? it would be awesome if Ford could keep pumping the $$$ into falcon to keep it in production for years and years just to shut-up these doom and gloom Falcon is dead people

[DanielXR8]

Originally Posted by nstg8a

Especially when ford has already shown in Europe that its not afraid to make the hard call and shut down plants. And when it does do it, there's no beating around the bush, dragging it out for years.

Wham bam shut the doors.

Media has been dribbling about the end of the falcon since Noah was a boy.

The challenge for Ford is that dropping local production will take a hit on the brand. An import only business will most likely never get in the top 5 brands - especially with the poor dealer network. Something they are belatedly looking to address.

Holdens General Manager has outright said that the hit to the brand of import only status, as a reason for keeping local production.

Even though many might buy the imported Ford/Holden stuff, they still like to think they are buying from a company with an Australian manufacturing investment.

I can't believe any local manufacturer sits back and says that the no comment post 2016 is a smart move for sales or local confidence in the product. A few members on here are deluding themselves on that one. Either Ford is really, really stuffing this close down up or I strongly suspect Ford Australia are putting up a good fight to argue for keeping the doors open for manufacturing and that's delaying a decision.

If the dealer network is fixed (a BIG ask) and the 2014 Falcon moves the goal posts on features and quality and please, finds an export market somewhere, then maybe things will pick up. An Australian built version of the Mustang platform for RHD markets wouldn't hurt either.

At first I thought Ford would close, but with FPV going belly up (yes that's effectively what happened when Prodive couldn't get the numbers to add up anymore) and the new Ecoboost and LPG Falcon going nowhere in sales, Ford has had one opportunity after another to say that the end of the road is here, but they haven't. I for one was very surprised they picked up FPV - even at a bargain price.

Then you have people like Sinead suddenly popping on here and another forum and wanting to engage in some PR spin and that's well,..... frankly not Ford Australia's past style.

So something is going on and I suspect its a fight to stay relevant in the Ford empire and to find a way to tie Australian production to the good work of the engineering team here and to Australian manufacturing being important to keeping the brand higher in the top 10.

Maybe in a few years the full story will come out. I suspect it will make a good read.