We had some really sad automotive news here yesterday. Ford will close its Australian manufacturing operations in three years time, after around 90 years of manufacturing in this country.
The Fords built in Australia between now and October 2016 will be the last Fords ever built here. Ford will close its engine building plant in Geelong and it’s vehicle assembly plant in Broadmeadows. It’s estimated that 1200 direct jobs will be lost, with the flow-on effect being up to several thousand more. Ford will still retain a vehicle development division here in Australia to work on global Ford vehicles.
A few random dot points about this news.
- There are a lot of people here in Australia angry about this, especially in light of the substantial financial assistance given to all three manufacturers still present in Australia. Ford, GM and Toyota have all received financial help to prop up their Australian manufacturing operations.
- Ford Australia CEO Bob Graziano stated yesterday that it costs them twice as much to manufacture in Australia compared to manufacturing in Europe. That’s staggering. Asian manufacturing is only a quarter of the cost of Australia.
- Much of that cost problem has to do with our high dollar. A lot of it is to do with a lack of scale. Ford builds two vehicles here – the Falcon and the Territory SUV. Neither of them are exported and both are large vehicles where the buyers are buying smaller sedans/hatches or compact SUV’s. Sales of the Territory have been OK, though they’re falling. Sales of the Falcon have been in the toilet for some time now, despite them releasing a 4-cylinder turbo version that’s reported to be quite good.
- There are two significant knock-on effect from this announcement, aside from the hardship it’ll cause those immediately involved. The first is the question mark this announcement puts on the Australian vehicle manufacturing industry as a whole. Holden and Toyota have both committed to continued manufacturing in Australia for around another 10 years. This announcement means their local component suppliers are going to lose one of just three customers, however. That’s going to put quite severe pressure on those suppliers and could make life quite difficult for the wider vehicle manufacturing sector.
- The second knock-on effect is on racing here in Australia. The most popular racing series here is the V8 Supercars, which for years was a series comprising just two manufacturers – Holden and Ford. Nissan joined this year as well as a privateer team running some AMG Benzes. Holden and Ford remain the backbone of the competition, however, and removing one of those is going to make things very interesting (hopefully in a good way).
- While this is bad news, credit to Ford for announcing it well in advance of the actual closure. Workers, government and Ford itself have three years and five months to sort out what happens next. It’s not good, but getting Ford to commit to three more years of losses is probably as good as it can be under the circumstances.
I ended up owning Holdens when I got my licence, but I grew up in a Ford house. Dad had an old Falcon wagon. Mum had a couple of Cortinas and a Laser. My uncle still has the XC Falcon sedan that he bought new in 1977 and his son, my cousin, has worked for Ford since…… forever. I’m sure he will be affected by the closures announced yesterday.
How did I ever end up in a Holden? Rebellion? Peer pressure? A bit of both?
None of that matters (as if it ever did).
I got a chance to spend a week in a Ford Focus earlier this year and I was very impressed with the chassis, though not so much with the engine. It was my first time behind the wheel of a Ford in a long time and I could see why the Focus gets the respect that it does.
My last experience with the Falcon was some time ago. We had a Falcon here at my workplace for a few years and personally, I quite liked it. The decision wasn’t mine when it came to replace it, however, and we’ve had a succession of Subarus since.
I feel bad about the loss of Ford manufacturing here in Australia. I wish they’d responded to the market better than what they did because it’s their workforce that’s going to pay for it.
We’ve lost part of the motoring fabric of this country, too. That’s another sad thing.
The Ford Falcon was as Australian icon but Ford were either unwilling or too slow to adapt it to changing market tastes. Ford don’t plan to use the Falcon name on another vehicle brought into this country, so one of Australia’s past favourites will be gone forever once this decision is implemented.
I’ll take an XP Coupe, thanks. White on red would be just fine.