Ford chief backs local production

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Source: The Australian Newspaper

This has come from the top of the FORD Empire. Looks good to me.

Ford chief backs local production
Andrew Trounson
October 28, 2006
FORD executive chairman William Clay Ford gave a much needed vote of confidence in the future of Australian car manufacturing in Geelong yesterday.

Asked whether he would have to sell Ford Australia, the great grandson of the legendary Henry Ford responded: "Are you kidding? No.

"In terms of our investment in Australia, in terms of our competitiveness in Australia, there won't be compromises at all."

But Mr Ford, 49, known as Bill, can't blame journalists for asking. This week Ford announced a disastrous $US5.8 billion ($7.6 billion) loss for the third quarter as it was hit by massive restructuring charges from laying off workers and writing down assets.

Even aside from those charges, the operating loss was still $US1.2 billion as it battles rising competition from the likes of Toyota, and consumers turn away from its petrol-guzzling sports utility vehicles and light trucks. Ford's market share in the US has dropped from 25 per cent in 1995 to about 16 per cent.

And the Australian operations aren't immune. All four Australian car makers are under pressure as domestic buyers increasingly embrace imported small cars rather than the large passenger cars made here, the Commodores, Falcons, Camrys and 380s.

Earlier this month Ford cut back production at its Broadmeadows plant by 20 per cent to 360 cars a day.

At the same time competitor Mitsubishi is under siege from relentless, and perhaps mischievous, speculation that it will be forced to shut down manufacturing as the new 380 fails to make sales targets.

On his first visit to Australia, Mr Ford was upbeat on the country's prospects. But while he is confident that Australian car manufacturing has a future, he talked mostly of the potential for Australia to become a hub for research and development.

"It (Australian car manufacturing) does have a long-term future and one of the things that will ensure that future is the fact that it will become, for Ford, an intellectual capital for Asia."

Outside the marquee where he was speaking are the concrete slab foundations of Ford's new research and development centre being built at Geelong.

Ford, like the other car makers here, is increasingly looking to leverage off Australia's attractions as a technology centre to site global development work here.

Ford, for example, is developing a new global ute platform here, and Mr Ford said it was possible other platforms could be developed in Australia.

But key for the Australian industry has been ongoing government subsidies to help it move away from the protection of tariffs that years ago were as high as almost 60 per cent, but are now down to 10 per cent.

The subsidy program amounts to over $7 billion between 2001 and 2015 with the car makers eligible for 55 per cent of that.

Asked whether Ford would have to pack up and leave once the subsidies ran out, Mr Ford could not help quipping that he would be "twisting" the Government's arm for continued support well before then, but then reiterated that "we aren't packing up and going anywhere".

Asked whether Ford could eventually produce a small car in Australia, he said it was possible but that the Australian market might not be the best place to do it. It was also possible that a hybrid car could be produced here. But Ford Australia boss Tom Gorman said the focus here was on LPG and clean diesel.

[Outbackjack]

I wonder if he took a XR8 for a spin???