The glass is half empty at GoAuto...

[Road_Warrior]

Does Paul Gover work for this mob now? Haven't seen this sort of drivel about Ford for ages.

http://www.goauto.com.au/mellor/mell...2576000083B801

50,000 units lost from local production as Ford axes Focus production plan

By JAMES STANFORD 28 July 2009

FORD Australia is facing a 50,000 annual production shortfall in 2011 after cancelling its plan to build the Focus small car locally.

Apart from the loss of production of Focus for the local market, the company will miss out on a predicted annual export volume of 15,000 cars, while 300 jobs it said would be created by the small-car plan will not materialise.

The collapse of the Focus production plan means Ford Australia’s fate will continue to be dependent on its Falcon large car, Territory SUV and regional engineering work, with exports expected to remain minimal.

Ford sources are confident the decision to introduce a four-cylinder Falcon and diesel Territory will lead to an increase of local production volumes that would counter the Focus loss and that the company will remain viable without making it here.

Ford Australia announced the death of the local Focus at the same time it revealed plans to produce a four-cylinder Falcon and diesel Territory, a calculated approach to team good news with bad and limit the negativity of media coverage.

The $300 million Focus project was announced in July 2007, with plans to the next generation small car in Campbellfield using panels stamped in Geelong. Initial annual production was put at 40,000 based on a calculation of 2000 Australian sales a month and around 15,000 exports a year.

A few months later, then Ford Australia president Tom Gorman told GoAuto that the company would probably make more, given the potential for strong local sales.

“If we go to 3000 a month that is 36,000 (units a year) and add the 15,000 (export) units to that and you’re a little over 50,000, so I think the right number for us is between 40,000 and 50,000,” he said. At the Campbellfield press conference last Friday, Ford Australia president Marin Burela afforded the Focus production cancellation a few short sentences, while federal industry minister Kim Carr did not mention the loss at all in his speech that followed.

Mr Burela put the decision to not produce the Focus in Australia down to changing economic conditions and the competiveness of the small car market which meant the business case no longer stacked up.

“Although this was a very difficult decision it is the right decision for Ford Australia,” Mr Burela said.

“After assessing the market requirements, the cost of producing the car in Australia in these extreme changed conditions (sic), we concluded we could not profitably manufacture the car here.”

Mr Burela said the decision to cancel the locally made Focus was made just two weeks ago.

Ford Australia is understood to have been against the local Focus plan, but Ford Motor Company leaders in Detroit helped determine the decision.

Focus production for Australia, much of Asia and South Africa will now come from a low-cost production country in Asia, most likely Ford in Thailand, which will soon begin producing the Fiesta.

The decision came down to Ford Australia not being able to match the cut-price production cost of the Asian location. From an importer’s perspective, Thailand production has the added attraction of a free-trade agreement with Australia. Ford sources say that given most of the rivals for the Focus come from relatively low-cost locations within Asia, except for the Japanese Toyota Corolla, the small Ford would have either been too expensive to compete or would have lost money.

This calculation contradicts the GM Holden plan to build a small car in Australia from next year, despite the fact that it already imports the Cruze produced by GM Daewoo in South Korea. While GM Holden was pledged support of $149 million from the Rudd government (and a further $30 million from the South Australian state government), the Focus production plan was only allocated a total of $20 million of federal funding by the Howard government and Victorian state government in 2007.

Ford sources have told GoAuto that the Focus production cancellation was not related to this disparity in funding and that a large amount of government investment would not have saved the project.

Ford Australia has confirmed it had not yet collected any of the $20 million funding that was on offer from the governments for the Focus project. GoAuto asked Senator Carr if the government was disappointed by the loss of the Ford small car production.

“Of course we are disappointed,” he said. “The fact is that we don’t ask companies to undertake decisions that are not economically viable. The company has made the decision.”

Australian Manufacturing Workers Union vehicle division nation secretary Ian Jones backed Ford Australia’s decision to cancel its small-car production plan, stating the union always doubted it would have been successful.

“We said this to Marin both when he first came here and to his predecessor (Bill Osborne) that whilst it was good to have the announcement in terms of the employment that it was going to generate even at its maximum it was really at the fringe,” he said.

The AMWU publicly supported the Focus plan at the time it was announced, but expressed concern that much of the car would be imported.

Mr Jones said Ford Australia should stick to building large cars, something it did best. “That is a much better strategy than pinning your hopes on a small car that we were always trepidatious about.”

While Ford is largely limiting itself to domestic sales of large cars, a segment that has been shedding market share consistently for the last decade, Mr Burela said there were still enough sales to justify a local manufacturing operation. “115,000 DE cars were sold in Australia last year. Quite frankly, there are three competitors – Holden, Ford and Toyota – not a bad segment to be in,” he said.

“When you go back and look at that and think if we can deliver on the promises and commitments that we have made today then I think we have a secure future moving forward.”

If making the Focus here was going to be lean, almost loss-making, what would these GoAuto clowns have Ford do, just build it anyway?? What a bunch of douchebags.

[alecrain]

I'm with you,
most of the press reports are biased, no matter what Ford does.

[Crazed]

The article is totally justifed. When the local Focus was announced, eveyone was saying that the large car is dying and that familes and fleets want smaller 4 cylinder cars. This has not changed.

50,000 units of production is a lot, and would of added significantly to Ford's economies of scale and Australia's manufacturing. Ford is now in a situation where a imported costly engine is going to be added to the Falcon, and this is supposed to get fleets and families back into Falcon. Considering a Falcon XT currently retails for over 40 grand on the road (the price of a Kluger or Territory) im not sure how Ford will reign in the price

Im in two minds about all this, I agree that Ford should focus on its strengths of large rear wheel drive cars, but at the same time I see the market more aligning to small 4 cylinder cars and to bigger and more practical SUVs and wagons - there are so many large 4wd owners who wont ever go back to a sedan because of the lack of utility (once youve tasted a practical car you will miss its flexibilty) instead they will downsize to smaller SUVs or get station wagons.

Ford have made it clear there are no export plans, so I see the sedan-only Falcon becoming a more performance or luxury niche car, I just would of thought the Focus would have been a good mass produced capacity filler for the factory

[Dave_au]

I don't know where you guys are coming from but I actually think that article was balanced.

Ford Australia was forecast to build 40,000 focii in 2011, of which 15,000 were to be exported; clearly that's not going to happen now, and do we really think Falcon sales will jump 3,330 units per month to fill this void just because they now have a V4 or direct LPG option? Doubt it.

Likewise, the article states that Australian production of Focus would never have held a break even price point to other competitors, which probably pushes the argument for local automotive production being unviable further.

[Gobes32]

Originally Posted by Dave_au

Likewise, the article states that Australian production of Focus would never have held a break even price point to other competitors, which probably pushes the argument for local automotive production being unviable further.

The problem is that we do not have the volume, America is planning on building 500,000 Focus a year........ We would build 50,000 in a good year.

[Road_Warrior]

My point was that despite the lack of financial benefit of making the car here, which had been quite clearly spelt out by Ford, they chose to bang on about manufacturing volume like nothing else matters. Volume means nothing without profits.

do we really think Falcon sales will jump 3,330 units per month to fill this void just because they now have a V4 or direct LPG option? Doubt it

Of course not, but combined with a DI-D Territory the shortfall may get a bit closer.

[Eu-GenixX]

too much emphasis was placed on unit numbers... i'd prefer ford to sell 10,000 units at a profit.. than to sell 50,000 units at a loss... and i think thats what ford are trying to focus on... making money.. not making more cars than anyone else...

[Wretched]

Originally Posted by Eu-GenixX

too much emphasis was placed on unit numbers... i'd prefer ford to sell 10,000 units at a profit.. than to sell 50,000 units at a loss... and i think thats what ford are trying to focus on... making money.. not making more cars than anyone else...

That's how it should be too.
Though the downside is, the less vehicles they make (more $$ per car though), the less staff on the floor they will require, meaning more bad publicity when they start canning staff. A double edged sword really.

I'd prefer Ford to make money on each car, that way their future is better guaranteed.

[Polyal]

And everyone seems to forget that FoA do ALOT more than manufacture cars, aslong as there is the volume to keep local manufacturing employees in their jobs who cares if they are not doing massive volumes. Im sure FoA's balance sheet relies just as heavily on R&D work for Ford.

[ltd]

Price of manufacturing is getting higher in Oz, and the price of manufacturing in places like Brazil or China on a large scale are less than Oz. It's a shame but inevitable. BTW, the export program for large RWD cars is not necessarily dead, there is a bit of a trade off between ford USA for the 2.0l engine and a possible export of some kind for ford aus (perhaps floorpressings or other bits). Another fascinating tidbit of information is that Ford Aus were the only carmaker in Australia to increase sales.

[ltd]

Oh I forgot, for those who received the last ford magazine (April or May), on the back cover there is detail of the fiesta. There is also a quote from Paul Gover saying "simply the best ever"; I'd agree he formulates his praise but considering he loves commodores he can't be all bad.

[Nikked]

Its cheaper to build the focus in South Africa. Ford Au is focusing on keeping the falcon alive,thats the volume seller for how long? Makeing sure that the falcon contiunes is essential. I cant help but think that the falcon is being primed for a global assult...


...also, ford would not have made a comfortable enough profit on the focus, it sells for >25000? How on earth could we produce it with australian labour and remain cheap?

[Bossxr8]

I think they are still looking at exporting the Falcon. Having an economical 4 cylinder version will add another positive to those chances.

[vztrt]

Originally Posted by Bossxr8

I think they are still looking at exporting the Falcon. Having an economical 4 cylinder version will add another positive to those chances.

Has there been any word on the export of the I6 to the Chinese??

[Bossxr8]

Originally Posted by vztrt

Has there been any word on the export of the I6 to the Chinese??

Nothing but rumours.

[last fairlane]

back in 1997 I went to England and met people that had Granadas
one a V6 3 Litre that went well
one had a V6 twin turbo that flew
and one had a 2 Litre 4 cylinder
and that was interesting around town a bit lazy but on the freeway it cracked a ton no sweat and the Poms talk in Miles not Ks
anyway the Granada is only a couple of inches smaller than our Falcon
so maybe a turbo Falcon might just work
thanks John
like they say I put my money where my mouth is
Ive got an AU Fairmont and the Mrs well hers is only a BA Ghia