Ford has been building vehicles in Australia since 1925 but that will end on 31 October 2016.
Until then, the American giant will continue to build Falcon, Falcon Ute and Territory models at its Broadmeadows, Victoria plant and says it will introduce the facelifted 2014 Falcon lineup on-schedule.
But in the end, the numbers are irrefutable – a $141-million loss for Ford Australia last year bringing cumulative losses over the last five years to more than $600-million.
Ford currently employs 3100 people in Broadmeadows, Geelong and five regional offices. Around 1200 jobs will become redundant when production ceases and Ford switches to full-line importation. Importantly, Ford’s regional R & D operation – which developed the range ute for global markets and the Figo compact for India – will continue its role in developing all-new vehicles.
Ford says all entitlements for the 1200 workers who will become redundant are protected and Prime Minister Julia Gillard has promised $40-million dollars to assist affected communities and $10-million to help the supplier industry through the transition period.
Ford chief Bob Graziano said the Falcon nameplate - which is synonymous with Australian-made Fords – will be retired when production ceases. However there have been some reports the Territory badge could continue.
Mr Graziano said the timing of the announcement – just ahead of the Federal election and on the same day Holden began rolling-out the all-new VF Commodore – was beyond his control and came following late-night telephone discussions with Ford’s Detroit head office. He made the tough announcement to Ford staff ahead of this morning’s press conference.
“As you know, the Australian manufacturing industry has been facing challenging conditions,” Mr Graziano said. “In light of that we will cease our manufacturing in October 2016. The decision was not made lightly and we understand the very real impact of this decision. (But) manufacturing is no longer viable for Ford in Australia in the long term.”
While rival local manufacturers Holden and Toyota continue to build large cars (Commodore, Camry/Avalon) most of their local sales are to fleet/government buyers and both enjoy strong export sales. For whatever reason, Ford Australia has never been able to secure large export programs for either Falcon or Territory.
That lack of scale (compounded by diminishing local sales which saw only 14,026 Falcons sold last year) and high local production costs are the main reasons behind Ford ‘s tough situation. Mr Graziano said the cost of producing a car in Australia is four times the cost to produce it in Asia and twice the cost of producing it in Europe.
Today’s announcement came after Ford wrapped-up its final studies to build a business case to keep production in Australia. Those studies showed no matter how much Government assistance was provided, local manufacturing has reached the stage where it is unsustainable for Ford.
Addressing the issue of taxpayer funded assistance for the car industry, Mr Graziano pointed-out for every $1 Ford received from the Federal Government, the company had invested $6.
As for the future, Ford says while the Falcon nameplate will be retired, there will be a 30 per-cent increase in the different models it will be offering Australian new car buyers as a full-line importer.
And so the speculation began…
If Ford decides it still needs a large sedan in Australia, a right-hand-drive version of the North American Taurus would seem the most likely candidate. As for the SUV to replace the Territory, Ford has many options in its global portfolio including the North American Explorer (slightly larger than the Territory) or a new SUV based on the Ford Ranger ute platform.
Neither Taurus nor Explorer are currently built in right-hand-drive but this is relatively straight-forward. The issue would be timing in terms of the model life of current models.
And that’s the good new for local Ford fans and new car buyers – both the all-new Taurus and Explorer are great cars which have received excellent reviews from the North American media.
