Ford tried to save our manufacturing plants: Mullaly

[Road_Warrior]

http://www.carsguide.com.au/news-and...ord_bosses_qa/

The global boss of Ford Alan Mulally delayed the shutdown of the company’s Australian factories in more than 300 meetings held over seven years -- during which time the car giant lost more than half a billion dollars trying to keep them alive.

In an exclusive interview with News Corp in Sydney today Mr Mulally revealed the sharp decline in Falcon sales and reduced output at Ford’s car assembly line in Broadmeadows and the engine factory in Geelong were discussed weekly at the highest levels of the company in Detroit “ever since I started at Ford”.

The former Boeing executive, who joined Ford in 2006, was in Australia to confirm plans to reintroduce the Ford Mustang and unveil 11 other top secret models that will help fill the void when the Falcon and Territory exit Australian showrooms in 2016. Mr Mulally said the decision in May to shut the Australian factories was made in Detroit approximately 48 hours before Ford employees were told on the production lines.

“We really had been trying hard to find a way to make it work for years,” Mr Mulally said. “Ever since I started we’ve been reviewing all the operations around the world and (Australia) was a regular part of our review process since I’ve been here.” He said the future of the Australian operations would be discussed in two-and-a-half hour meetings every Thursday scheduled to give Ford executives in Detroit an update on all markets around the world.

“I will always feel really good that we worked so hard (to keep Ford’s manufacturing operations in Australia),” said Mr Mulally. “We take these decisions very seriously. It impacts a lot of people’s lives. It was a very thoughtful decision, a very hard decision.” He said company founder Henry Ford’s original vision was to “manufacture cars where we had major markets”.

“But at the end of the day when you look at the exchange rates, and the cost structure it was clearly best to serve Australian customers (from overseas factories),” he said. Ford’s chief operating officer Mark Fields said the three-year notice was among the longest warning of a factory closure in the Ford world.

“The approach we took was to treat people respectfully … and give them enough time to transition to the next chapter of their lives,” said Mr Fields. “We knew there was going to be an impact which is why we wanted an orderly transition. We wanted to be absolutely as transparent as we can.” Ford said it is committed to keeping the Falcon alive until October 2016 even though industry analysts predict a drop-off in demand as a result of it going out of production.

“We will always take into account the changing environment (but) our plan is to make an orderly transition,” Mr Mulally said. The Mondeo medium-sized car will likely replace the Falcon because sales of large sedans have dropped below their mid-size peers. Ford also unveiled a new locally-designed and engineered seven-seat SUV called the Everest -- but it will be likely be made in Thailand.

The Ford Mustang due in Australia in late 2015 or early 2016 will not be revealed until next April at the New York motor show. Ford says it will increase the number of models in its Australian range by 30 per cent between now and when the last Falcon rolls off the Broadmeadows production line. Among the stars in its line-up is a new car with a special key that can be programmed by parents of teenagers.

It can mute the stereo, limit the speed and ensure all safety systems cannot be switched off. It will also call 000 in a crash in which airbags deploy. Ford vehicles have been on sale in Australia for almost 110 years and the company has manufactured locally since 1925. But it will become an import-only brand by the end of 2016.

Finally some words from Ford’s top man. For me, that has been the one thing that has been lacking in the aftermath of the closure announcement.

[sbutler]

Agreed...Its good to know they tried all they could to make it work. But in the end it was just a non profit option.. Sad..

[Gadgetman]

Originally Posted by sbutler

Agreed...Its good to know they tried all they could to make it work. But in the end it was just a non profit option.. Sad..

With all due respect, I thought Graziano and the public affairs team spelt it out pretty well at the time of announcement. Its good to hear it from the Chief but for me, Graziano spelt it out loud and clear.

[Franco Cozzo]

Doesn't matter if the Ford Australia worker is getting paid $25 an hour or $5 an hour, you can't compete with Ford Thailand wages and production capability.

Free trade agreement between Australia and Thailand killed Ford Australia.

[Gadgetman]

Originally Posted by Big Damo

Doesn't matter if the Ford Australia worker is getting paid $25 an hour or $5 an hour, you can't compete with Ford Thailand wages and production capability.

Free trade agreement between Australia and Thailand killed Ford Australia.

There will always be a country that can manufacture cheaper than another. Problem is with us, every country in asia can produce for far far less which makes manufacturing in Australia unprofitable for international companies that have choice.

[Brazen]

Originally Posted by Gadgetman

There will always be a country that can manufacture cheaper than another. Problem is with us, every country in asia can produce for far far less which makes manufacturing in Australia unprofitable for international companies that have choice.

The biggest expense is capital. Setting up 700 million dollar factory is the biggest ongoing expense. 150 million on a paint shop/presses is quite normal for an plant upgrade. Infrastructure for export - they are what drive costs. Labour and dont really make much of a difference in such a capital intensive industry, hence why Australia can be great at mining when they pay miners $150,000 a year compared to Africa where they get about US$1200.

Look at Germany, has some of the most expensive labour on the planet a stone throw from bankrupt or Eastern European countries which have far far lower labour costs. But look at them, one of the biggest car-making nations in the world.

Labour is never the issue, it is utilising capital. Ford didnt make enough cars here for the capital they had tied up in the plant - it wasnt efficent. They made stupid decision after stupid decision which has killed them. They could of been the biggest car maker in Australia. But they took a wrong turn.

They killed local Focus/Kuga even though the market had been heading towards higher content small and compact SUV vehicles for over a decade.

They killed wagon even though it was the biggest selling single Falcon variant (XT wagon outsold sedan 4 to 1).

They kept the I6 instead of going to global V6 - meaning they couldnt export to the Middle East, Europe and the US.

They brought in the Ecoboost 4 cylinder, but because they kept the I6 plant open they couldnt afford the Ecoboost to take many sales. So they kept one-armed tied behind the Ecoboost back so it didnt take I6 sales. They didnt even include the Ecoboost in the XR which was over 45% of sales and by far the biggest seller to private buyers.

They also couldnt put the diesel in the Falcon again because of the I6 plant and the minimum production it needed to survive.

With no local I6, they could of really tailored Falcon pricing and drivetrains to the local and foreign market instead of tailoring it to engine production volumes.


Really if they were going to kill off Focus, they should of killed off I6 so they could make the plant a sole Falcon/Territory plant servicing the world's niche markets with a range of global engines.

If they were going to keep the I6, they were effectively relegating Falcon to low volume production and would therefore REALLY need Focus to build volume.

Never had a chance.

[Gadgetman]

Originally Posted by Brazen

Labour is never the issue, it is utilising capital. Ford didnt make enough cars here for the capital they had tied up in the plant - it wasnt efficent. They made stupid decision after stupid decision which has killed them. They could of been the biggest car maker in Australia. But they took a wrong turn.

Really, You should have been there yesterday when Holden convinced there employees to take a pay cut so Holden could last a little longer.

They killed local Focus/Kuga even though the market had been heading towards higher content small and compact SUV vehicles for over a decade.
Yup. Sure. So you have done the calculations and worked out through your extensive knowledge in mass production experience that Ford should have built Kugas and Focus here cause they would be more profitable long term for doing so.


They killed wagon even though it was the biggest selling single Falcon variant (XT wagon outsold sedan 4 to 1).

Yup and who were buying them? Telstra. Were they committed to buying them long term? No. Ford saw the writing on the wall and dropped off accordingly. The retail and small business demand for falcon wagon was neglible.


They kept the I6 instead of going to global V6 - meaning they couldnt export to the Middle East, Europe and the US.

Yup and be as successful as Holden and toyota whom are both dying with this program presently.

They brought in the Ecoboost 4 cylinder, but because they kept the I6 plant open they couldnt afford the Ecoboost to take many sales. So they kept one-armed tied behind the Ecoboost back so it didnt take I6 sales. They didnt even include the Ecoboost in the XR which was over 45% of sales and by far the biggest seller to private buyers.

If you think extensive marketing of the 4 cyl would help improve Falcon numbers long term, you are kidding yourself.

They also couldnt put the diesel in the Falcon again because of the I6 plant and the minimum production it needed to survive.

Same applies to a diesel falcon. People just arent interested in large sedans anymore. Want to know why mercedes sells out its entire range but cant move E or S class. Same issue pal.

Never had a chance.

You got one thing right. It did not have a chance but for a different reasons. Ford is a company whose main aim is to show as much return on investment as any business would. The fact that they have chosen to stop producing in Australia proves that it isnt as viable as say asia. They do not owe the Austalian public anything at all. We as a country have put ourselves in this position.

[kypez]

Needed more models being built and in particular, the Focus... That would have saved us. Just like all the euro car makers, they all have small cars in their stables and thats the future. Losing the Focus production was the beginning of the end of Australian manufacturing for Ford.

[Nikked]

Originally Posted by kypez

Needed more models being built and in particular, the Focus... That would have saved us. Just like all the euro car makers, they all have small cars in their stables and thats the future. Losing the Focus production was the beginning of the end of Australian manufacturing for Ford.

Focus wouldn't have done a real lot...profit margin would be very low, and Holden have claimed that the Cruze erodes profits for them...

[kypez]

Originally Posted by Nikked

Focus wouldn't have done a real lot...profit margin would be very low, and Holden have claimed that the Cruze erodes profits for them...

Oh no doubt. I'm just saying there was absolutely no hope with just Falcon though with the way Large cars sales nose dived. The Focus could have prolonged that for a while.

The Cruze will hurt Holden more with the falling dollar since a lot of their components are imported. Do they export Cruze?

Very good on Mullaly coming out and saying this. Might be able to win back some good will with the Australian buyers

[Gassy]

Originally Posted by kypez

Needed more models being built and in particular, the Focus... That would have saved us. Just like all the euro car makers, they all have small cars in their stables and thats the future. Losing the Focus production was the beginning of the end of Australian manufacturing for Ford.

Which is odd - considering statistically Australians are getting larger/fatter.. You would assume there would be a need for larger cars - just sayin

[vztrt]

Originally Posted by Gassy

Which is odd - considering statistically Australians are getting larger/fatter.. You would assume there would be a need for larger cars - just sayin

Hence why SUV's are selling more and more.

[MyAU1]

Originally Posted by Gassy

Which is odd - considering statistically Australians are getting larger/fatter.. You would assume there would be a need for larger cars - just sayin

Does this mean there will be no place in OZ for an American Muscle Car? lol


1st Car

1966 Mark 1 Cortina, 1981 Falcon, 1999 Falcon & a 2006 Falcon.

All of which had/have their faults. The cheapest to fix was the Cortina, which had common starter motor problem. A wedge of timber was used to fix the fault as the starter would come lose and knock against the motor. The Combination Switch on the BF may take a little extra to repair though!!!

[mik]

I don't don't know Kypez, i think ford beans counters would have done the sums in the cold hard light of day , and while yes it may have made some dollars with the focus here, making them elsewhere at a cheaper cost would make them more $$$.
i think Since the GFC these car companies have woken up they must maximize profit if they are going to survive against the cheap labor countries, and means not building in expensive to manufacture countries..... and that is Australia.

[kypez]

Originally Posted by mik

I don't don't know Kypez, i think ford beans counters would have done the sums in the cold hard light of day , and while yes it may have made some dollars with the focus here, making them elsewhere at a cheaper cost would make them more $$$.
i think Since the GFC these car companies have woken up they must maximize profit if they are going to survive against the cheap labor countries, and means not building in expensive to manufacture countries..... and that is Australia.

Agreed... though with Mazda selling at 3000 units, I think there would have been more profitability with the Focus here. Agreed that its still cheaper anywhere else in the world. Will be interesting to see where the dollar falls to and to see what it would be worth then.

[Polyal]

In time I would have loved to hear about what options they actually looked at. Did they ever think of making a GWRD platform to serve Mustang/Lincoln/Falcon etc..that was the only way it was ever going to work.

BTW what platform does the new Mustang use?

The Focus plan would never work, why would it when an identical car is made in Thailand? Holdens Cruze idea will fail..and hard, the volume is not there and the margin on smaller cars makes it hard. And its just going to get more competitive.

[Rodge]

Hearing from Ford's top man that they tried hard eases the pain a little as does the very lengthy notice period of over 3 years.

I appreciate what I have now more than at any time in my lengthy stint as a Ford customer. Wolfie with all its supercharged goodness is a keeper.

[Trump]

Why don't I believe him when he says "we did all we could do"...

[rdmr]

Originally Posted by Loud_Noises

Why don't I believe him when he says "we did all we could do"...

Did they ask the workers?
Did they ask the union?
No.
Then they did NOT do all they could have.

[DanielXR8]

Originally Posted by rdmr

Did they ask the workers?
Did they ask the union?
No.
Then they did NOT do all they could have.

Did they ask the customers who left Falcon?

[malazn mafia]

Originally Posted by Loud_Noises

Why don't I believe him when he says "we did all we could do"...

Somebody let Ford AUS install the Miami V8 into Falcon, ecoboost motor, TDCI motor into territory, ecoLPI programme. Maybe it all makes sense. Australian govt firstly responsible , and second an Australian buying public that wouldn't know a good car if it slapped them in the face and would prefer to either fork out for a German taxi or skimp on a Korean shopping trolley.

[Rico 110s]

Originally Posted by malazn mafia

Somebody let Ford AUS install the Miami V8 into Falcon, ecoboost motor, TDCI motor into territory, ecoLPI programme. Maybe it all makes sense. Australian govt firstly responsible , and second an Australian buying public that wouldn't know a good car if it slapped them in the face and would prefer to either fork out for a German taxi or skimp on a Korean shopping trolley.

They could of kept making the wagon even with an Ecoboost 4 cyl,and have a variety of options with the Falcon especially a Falcon with only the basic's like Hyundai only make a basic model, this is for people who only want to buy a new car but cant afford a top of the range.

This I feel is where Ford had lost sight of its original vision which was to create cars for the masses, Henry Ford made his money making cars that were cheap and reliable for the day not trying to make Cadillac's.

[Rico 110s]

Originally Posted by Rico 110s

They could of kept making the wagon even with an Ecoboost 4 cyl,and have a variety of options with the Falcon especially a Falcon with only the basic's like Hyundai only make a basic model, this is for people who only want to buy a new car but cant afford a top of the range.

This I feel is where Ford had lost sight of its original vision which was to create cars for the masses, Henry Ford made his money making cars that were cheap and reliable for the day not trying to make Cadillac's.

I want to add that Henry Ford would not have been noticed if not for his decision to race his car "Sweepstakes" against other popular vehicles of his day, and win!

[CyberWasp]

I do not feel that all was done to prevent this. The presentation highlighted all the money they have spent on R&D ect but none of it is placed in our local vehicles.

You can't tell me that there wouldn't be a case to sell the Falcon in America as a Lincoln, or that there wouldn't be a market for a Falcon Ute over there as well.


It would also make sense to build the Everest here, as it will be a higher profit vehicle. Thailand is not the most politically stable country in the world and also suffers from natural disasters.
Having a second plant elsewhere is not a bad idea if you think of the money you can loose when they had issues with flooding ect, that cause loss in production volumes.

[Polyal]

The workers have absolutely nothing to do with it, nor the unions, its about integration...or lack of it.

[Joe5619]

What did they try? He's said nothing here, other than a bit of PR stuff to try & keep the media happy.


Holden are trying, Ford did not!!! And before I get 100 quotes, this is my opinion & I'm allowed to have one.

I just hope they have enough good senses to stay in V8's. If they leave that, that is the last straw for me..

[Brazen]

Burela cancelling Focus/Kuga and keeping the I6 engine plant open killed Ford Australia. The years following they were just shifting deck chairs around on the Titianic. No global V6 for Falcon and no small car to build volume, they were doomed.

[mik]

Originally Posted by Brazen

Burela cancelling Focus/Kuga and keeping the I6 engine plant open killed Ford Australia. The years following they were just shifting deck chairs around on the Titanic. No global V6 for Falcon and no small car to build volume, they were doomed.

i have to agree mate, as much as i love grandpa's axe, i think it's short coming if there is one is the package, it's a long bugger that restricts some options in the coachwork department, perhaps another mark against it is the cost to keep building it here, i suspect it would be cheaper to ship one of the yank already built v6's here and slot it in:(.

[Polyal]

Originally Posted by Joe5619

What did they try? He's said nothing here, other than a bit of PR stuff to try & keep the media happy.


Holden are trying, Ford did not!!! And before I get 100 quotes, this is my opinion & I'm allowed to have one.

I just hope they have enough good senses to stay in V8's. If they leave that, that is the last straw for me..

My tipping point is the guys and gals in R&D. Drop that and I am done, but god I am hanging to see the next XR6T.

[Struggo]

Originally Posted by Polyal

My tipping point is the guys and gals in R&D. Drop that and I am done, but god I am hanging to see the next XR6T.

I can't see the R&D team lasting more than 10 years. By then they will more than likely shift it off shore also.

Lets hope not as we need these skills to be kept downunder.