Bill Ford: Ford Australia has "Long term Future"

[adrenaline]

Bill Ford declares the Blue Oval's Australian car plant has a ‘long-term future’

By NEIL McDONALD 1 November 2006, for GoAuto




In contrast to recent news, Bill Ford has declared a long term future for Ford Australia. He also mentions Ford Australia's RWD being a potential global architecture, citing the Crown Victoria. He must have really liked his tour over the weekend.

Originally Posted by GoAuto

FORD Motor Company executive chairman Bill Ford gave a vote of confidence to its Australian car manufacturing operation last week, stating that it had a "long-term future" despite the current downturn in large-car and medium-large SUV sales.

In his first visit to Australia, and just days after the American auto giant posted a disastrous $A7.6 billion third-quarter loss, Mr Ford flew into Melbourne from Beijing to open Ford Australia's new research and development facility at Geelong.

Among Mr Ford's other tasks was to drive the current range of Ford's Australian-built cars and works in progress, including the next-generation (2008) Falcon. The latter has design cues from the Iosis X concept car shown at the recent Paris motor show.

"Ford Australia has gone through tough patches before," Mr Ford told GoAuto last week. "Ford of Europe has gone through tough patches and now it's Ford North America's turn.

"The good news is that because we have this good geographic distribution, parts of the world do well and parts we have to fix and now most of our effort is on North America.

"We'll get that turned around. But in terms of investment for Australia, in terms of our competitiveness in Australia, that won’t be compromised at all."

Ford's market share in the United States dropped from 25 per cent in 1998 to 17.3 per cent last year and it is now working at a feverish pace to become more relevant to consumers, who are no longer purchasing SUVs, pick-up trucks and other large vehicles at the rate they did last century.

Similar issues are confronting Australian manufacturers. Earlier this month Ford cut production at its Broadmeadows plant by 20 per cent, from 450 cars to 360 cars a day, in direct response to a downturn in Falcon sales.

This followed a similar response by Mitsubishi in slashing production of the 380 as the Adelaide-built large car struggles in the marketplace.

Despite the current situation Down Under, Mr Ford remained upbeat about the state of the industry and Ford Australia's role as a centre of excellence for R&D within the region.

"It (Ford Australia) does have a long-term future," he said. "I think that one of the things that will ensure that future is the fact that, at least for Ford, it will become an intellectual capital for Asia.

"If you look at the growth that's going on in Asia it's tremendous over the next 10 years. And to have a centre like this, where human capital and the best minds in Australia will be put together, I think will really ensure the long-term success of this industry.



(From left: Ford Australia CEO, Tom Gorman and Industry Minister, Ian Macfarlane with Bill Ford and Victorian Premier Steve Bracks.)


"There is no question the industry is going through a rough patch right now. You've got a mix-shift happening in this industry that is not helping many of the domestic producers, but we've gone through a tough patch before and we'll get through this one as well."

Ford's new R&D facility will employ 350 engineers when it comes on stream next September, helping position the group as a technical leader in the Asia-Pacific region.

Ford has already proved its mettle by developing the India Fiesta sedan model and work is now under way on a global utility that will be built in 80 markets around the world, including South America and Asia.

Although he stridently repeated he was not making any "product" announcements, Mr Ford said Ford Australia could take a lead role in developing a large rear-wheel drive vehicle for international markets. He affirmed that this could include the new-generation Crown Victoria for North America.

"It certainly is possible," he said. "We've demonstrated here over many years that we do those vehicles well here. We just have to make sure the market fits and that the economics make sense, but there is absolutely no reason why they couldn’t develop it."

Mr Ford and fellow American (and Ford Australia president) Tom Gorman were quick to point out that it was not Ford Australia's role to compete against other parts of the Ford empire with product, but rather to work in conjunction with the company's other assets.

"The thing about Ford is that we do have assets all around the world and what we need to do is figure out which product makes the most sense for those markets," Mr Ford said. "There is an extra case that resides in Australia in making rear-wheel drive architecture and there is no reason why that cannot be applied to the rest of the world."

The local auto industry invested more than $721 million in 2004-05, which is about 22 per cent of the R&D spent by the manufacturing sector and about 10 per cent of the spend by the whole industry sector.

[fpv_gtho]

Unfortunately an R&D department doesnt keep 6000 people at work. Thats all that Detroit are prepared to commit to at this point. The manufacturing side of everything is still under the same threat its always been under.

[adrenaline]

Why would they remove the manufacturing plant and keep R&D? If they remove the plant(s), then they would rely on imports or withdraw completely. When Bill says Ford Australia has a long term future, I assume that he means R&D AND the plants.

[SlickHolden]

One thing that will give ford a long term hold here is a global role with RWD. And i like the sound of that, The crown vic would be dying for something like a falcon rear. Toss in some exports and that can cover any lower sales in oz.

[fpv_gtho]

Originally Posted by ADRENALINE

Why would they remove the manufacturing plant and keep R&D? If they remove the plant(s), then they would rely on imports or withdraw completely. When Bill says Ford Australia has a long term future, I assume that he means R&D AND the plants.

Read between the lines and all he's really talking up locally is the R&D department. Its not Ford Australia to them, its Ford Asia-Pacific. The only thing thats going to keep Broadmeadows going is a solid export program, and that relies on Detroit loosening up on Crown Victoria exports. If that doesnt work out, Detroit will simply give Geelong all of Asia-Pacific's design work, something they might end up getting anyway.

[syko]

Originally Posted by fpv_gtho

Its not Ford Australia to them, its Ford Asia-Pacific.

The asia-pacific HQ is actually in Bangkok, not Australia

[fpv_gtho]

I didnt say it was, simply that Ford Global wont continue treating Australia seperate from the rest of the Asia-Pacific region.

[syko]

I think your overeacting just a tad, Ford Aus have already been given task of builting the T8 commerical platform which is pretty big. I'm sure they will get more when they have the capacity to do it. Its not like they have nothing to do at the moment.

[adrenaline]

I thought it was T6?

[fpv_gtho]

Ive never disputed theyve got a future, all ive said is R&D is the only thing Detroit are prepared to secure atm as theres alot of work in the Asia/Pacific region. Falcon wont be ready for LHD in 2008 as it wasnt part of the original plan for Orion. It'll more than likely be ready for 2010 or thereabouts.

Yes, it is T6, which theyre developing, not building.

[syko]

Originally Posted by ADRENALINE

I thought it was T6?

Thats what I meant

[adrenaline]

Ford to slash 600 jobs by Christmas.

Originally Posted by GoAuto

LUMBERED with declining sales for its Australian-built Falcon sedan and Territory SUV, Ford Australia will axe more than 600 jobs before Christmas, reducing its workforce by 10 per cent.

But the company does not expect to take further job action if large-vehicle sales continue to fall, according to spokesperson Sinead McAlary.

She told GoAutoNews this week there was no future "trigger point" at which more cuts would be taken.

"We're taking the action we believe we need now and we don't anticipate having to do any more," she said. "Our build rate and employment rate will match what we need and we'll move forward."

News of the company's decision late last week came just days after Ford Motor Company executive chairman Bill Ford visited Australia and insisted that the Blue Oval's manufacturing operations here had a "long-term future".

The latest announcement came less than three weeks after the company announced it would cut Falcon and Territory production at its Broadmeadows plant by 20 per cent from November – from 450 cars a day to 360 cars a day – in direct response to a downturn in market demand.

The axe will fall on 640 employees, 450 blue-collar and 190 white-collar.

Another 200 workers will be redirected onto other projects. The decision immediately attracted criticism from the Federal Government, which pointed the finger at the company’s failure to establish a significant export program for its vehicles – particularly in light of a $52.5 million handout it received earlier this year.

In countering some of the responses, Ms McAlary said there had been keen interest in the voluntary packages and, subsequently, Ford did not expect any forced retrenchments. She also said many workers had been at the company for a long time – 20 years in some cases – "so many are keen to move on to new projects".

"It's a competitive, fair package that we’re offering," she said. GoAuto understands workers will get 4.1 weeks' pay for every year worked.

Ms McAlary also said Ford intended to hire 350 engineers at its new Geelong R&D facility over the next 10 months, ahead of its opening next September.

Ford is not alone in having to take drastic action in recent times in response to the declining large-car market.

GM Holden shelved its third shift at its Elizabeth plant in Adelaide more than 12 months ago, which left 1400 workers without jobs, while Mitsubishi Australia has this year shed 350 jobs at its Tonsley Park assembly plant, also in Adelaide, amid weak demand for its 380 large sedan.

It was also forced to cut 1000 jobs when it announced the closure of its Lonsdale engine plant in 2004.

Industry statistics released last week show that large-car sales have declined 19.8 per cent this year. The market segment has taken a battering over the past 10 months as buyers desert the traditional big-six market for smaller vehicles.

The boom in medium-large SUVs has also ended – and fragmented with another wave of all-new entrants.

About 75 per cent of all passenger vehicles sold in Australia are now imported, aided by low tariffs and vehicle sourcing from low manufacturing cost countries like Thailand (with which Australia has a free-trade agreement) and South Korea.

Who didn't see this coming?

Oh well, in the case of those that have worked there for 20 years, with 4.1 weeks of salary for every year worked, they would get a 70 grand or so payout (based on a salary less than $900 p.w).

[fpv_gtho]

Well since they bumped daily production over 500 units, theyve had to reduce that twice now, once from 540 to 450, now to 360, and its only now theyre doing "voluntary redundancies".

Heres hoping they get a good export program. By my figuring theyve only really ever ran Broadmeadows at 1/3 its true capacity.

[Blitz_]

Do you think Ford Oz have left it a tad to late to create a larger, better export program?

[fpv_gtho]

Personally i think they shouldve had it ready for BA once VT exports materialised as a serious meal ticket to Holden. LHD has always been the limiting factor, as well as the Crown Victoria, and Ford have claimed for a while that LHD requires extra development, something that Orion is only getting because of the government grants. Actually, thats more like Ford only got the government grant on the condition they engineer Falcon and Territory for LHD.