Does Ford love Aussies back?

[csv8]

Does Ford love Aussies back?

* Philip King, Motoring editor
* From: The Australian
* January 16, 2010 12:00AM


"I LOVE Australia," says Ford chief executive Alan Mulally, and his affection is genuine. One of his daughters studied at Sydney University and he has made several trips down under over the past few years, beneath the radar of local media, to visit her.

Ford Australia knows, however, that this love is not blind. There are questions surrounding how the smallest of our local carmakers will continue to function under Mulally's vision for the company, known as One Ford. Its future has been cast into doubt by the abandonment last year of a plan to build a small car here and the absence of any alternative.

Australia may inspire ardour but Mulally wasn't lured from Boeing for his sentimental approach to business. He's being paid millions - an estimated US$13.5 million in 2008 - to get Ford back on the road.

Much of the debate about Ford Australia's future has centred on whether the Falcon, its large sedan, will continue and if so, what it will be like.

After almost 50 years on sale, Falcon is the longest running nameplate in Australia by far, and is synonymous with the brand. The unique Australian model is Ford's champion in the battle with Holden and brand loyalists are concerned that its replacement will depart from the traditional format of rear-wheel drive, the preferred layout for enthusiasts. There are even suggestions the badge will be discontinued.

However, Ford denies the Falcon name will die and these debates are a diversion from the real issue. Ford Australia would prefer to be discussing the relative merits of rear versus front-wheel drive than the bigger questions over its future: how does it fit into the One Ford plan?

And can it continue to build cars in Australia?

Mulally has brought about a remarkable change in the three years since taking the helm. He set out to refocus effort on the Blue Oval brand itself, selling off European assets that seldom - if ever - made a profit.

After Volvo is bought by Chinese car-maker Geely, there will be nothing left of a portfolio that once included Aston Martin, Jaguar and Land Rover.

More crucially, he refinanced the company's debt before the global credit meltdown. There may have been an element of luck in the timing, but the move meant Ford was the only one of the US Big Three to avoid bankruptcy last year and the goodwill engendered is paying dividends. Its US sales were down last year but Ford suffered much less than either GM or Chrysler. Its share price has enjoyed a substantial rebound and most surprising of all, its three global divisions are back in the black for the last reported quarter.

At the Detroit motor show this week, Ford's growing confidence and clarity of vision was there for all to see. In a rare double, it scooped both the major vehicle awards at the show - for best car and best truck - and in a move replete with symbolism, it's even rehiring workers in Michigan.

A key feature of the One Ford plan has been a move to global integration of product development. The days when subsidiaries could develop cars just for their own markets - as Ford Australia has done for decades with the Falcon - are gone because it involves wasteful duplication.

The Fiesta city car was the first step in this direction. Developed in Europe, it has just been launched stateside and the versions sold around the world share about 65 per cent of their parts.

But that is just the start. Ford's centrepiece at the Detroit show was the next generation of its Focus, a small car one size up from the Fiesta. When it goes on sale in about a year, it will be virtually identical everywhere. Before long, this will be true for about 80 per cent of Ford's range. The mid-size Mondeo, sold in Europe, will converge with the Fusion, which is a US model. There will be one workhorse model and one van range.

"People who make one vehicle for one country - a different vehicle - those days are gone because you can't compete with the global companies," Mulally said on the eve of the Detroit motor show this week.

Hence the debate about what the Falcon will be. In other markets, Ford has a large car called the Crown Victoria, which is a front-wheel drive dinosaur that has little in common with the Falcon. Australian loyalists would much prefer an alignment with the Mustang, an American performance rear-wheel drive.

However, work on a rear-drive vehicle has been suspended and a decision one way or the other is low on Ford's list of priorities. Large cars do nothing for corporate fuel efficiency targets, which are getting tighter all the time, and even in markets that buy them in volume, they are declining in popularity.

Mulally believes this is an inexorable trend.

"The consumer worldwide is moving to smaller, more efficient vehicles," he said when he did front the media on a visit to Melbourne 18 months ago, "I think that is going to be a permanent transition."

Timing is critical for the Australian outfit. It needs a decision by mid-2011 if it's going to have a replacement ready for when the Falcon model cycle ends in 2015.

But even if the Australian operation gets a large rear-wheel drive car as part of the global plan, producing it at Ford's ageing Broadmeadows plant in Melbourne would involve substantial investment with little prospect of financial returns.

In Australia the large car market has shrunk to barely a third of the size from a decade ago, at just 11 per cent of all vehicle sales. Since the vast majority are fleet sales with thin margins, the economics of making them has got tougher and tougher.

That's especially true when your volumes are small and you lack an export program. Like Ford Australia. With 2009 production of about 55,000 vehicles, Ford Australia makes far fewer vehicles here than either Holden or Toyota and nowhere near the levels considered necessary for viability. It has "streamlined" its manufacturing over the past two years but still reported a loss of $274 million for 2008 - even as Ford's Asia-Pacific region is returning a profit. By comparison, Holden notched up a $70m loss in its last annual report and Toyota turned a $123m profit.

Aware of the problem, Ford came up with a plan to build the next generation Focus here, starting in 2011.

This scheme, which was promoted by Mulally on his Melbourne visit, was designed to achieve two things: to get the Australian operation back into the black and secure its long-term future as a manufacturer.

At the time, it was described as "absolutely critical" to make Ford Australia relevant to local buyers and the logic of the decision was irresistible.

However, in an abrupt reversal last year, that plan was abandoned in favour of a raft of decisions concerning the Falcon and its sister product, the Territory SUV, which is another unique Australian model built off the same foundations. Both will get new, more efficient engines - a turbocharged four-cylinder engine in the Falcon, a diesel for the Territory - in 2011.

Ford is investing $230m to engineer these upgrades and that's not the action of a company planning to shut up shop, local chief Marin Burela says. Instead, he believes it will spur a sales resurgence and - eventually - a return to profit.

"We are not doing this just to stand still. We're doing it to drive incrementality," Burela said in Detroit this week. "We would not be investing the level of money we are if I didn't feel confident that growth is going to occur."

However, Mitsubishi, which until a year ago built cars in Adelaide, spent much more on its 380 large sedan project and still got its marching orders. A four-cylinder Falcon is an untested product and buyers have been reluctant to drive large cars with small engines in the past.

The Territory would have benefited from a diesel engine if one had been available two years ago, but it's now looking tired in a segment with lots of fresh models.

Even if sales rise, the economics remain challenging and nothing in these initiatives extends the life of Ford's Melbourne factory beyond the expiry date of the Falcon, in 2015.

If these upgrades add thousands to the output at Broadmeadows, the financial case for reinvestment still looks thin.

The equation isn't helped by the reduction in import tariffs on cars, which dropped from 10 per cent to 5 per cent at the beginning of this year in a decision steadfastly opposed by the local makers.

"Every element of competitiveness for the Australian industry is so important right now," Mulally said on that Melbourne visit. "At this critical time, as we're retooling the industry, maybe a pause would be appropriate."

The government ignored those pleas, despite delivering almost everything else the local makers requested after its industry review.

Now, with no small car to build and no large car in the works, it's an open question of how Ford Australia's factory will fit into the One Ford plan, or where the cash to retool will come from.

And Ford has no answer.

"Australia is a very important market for us and we've worked hard to be competitive," Mulally said in response this week. "No matter what, were going to serve the Australian market."

Ah. You can feel the love.

[Bobman]

http://www.heraldsun.com.au/news/bre...-1225820883573

FORD Falcon fans are banding together to fight for the iconic Australian marque's future.

Ford chief executive Alan Mulally last week gave notice that the Falcon might disappear as the company plans for only one large car platform for all world markets under its One Ford program.

Since he made the comments Save the Falcon groups numbering more than 2000 members have sprung up on Facebook, and Ford owners rallied in Cairns over the weekend.

Neil Newcombe, who organised Sunday's 40-car Save the Falcon rally from Cairns to Port Douglas, said the North Queensland Performance Ford Club would lobby Ford to continue Falcon production.

"We'll let them know how strongly we feel about it,'' Mr Newcombe said today.
`
"From an Australian point of view we want to keep (the car) as Australian as we can.

"I'd rather be travelling in a car that's preferably Australian designed and made.

"Knowing where Ford are going to go with their One Ford program, if we can get as much Australian design into it as we can, all the better.''

Mr Newcombe said he and others objected to any shift to front-wheel drive, with rear-wheel drive better suited to Australian conditions and for conversion to utes.

"Front-wheel drive utes just don't work,'' he said.

A One Ford model could also cost the Falcon its power plant, Mr Newcombe said.

"If they go front-wheel drive we're going to more than likely lose the V8,'' he said.

Mr Newcombe said new technology meant the fuel consumption of V8s could be kept to reasonable levels.

One Ford fan has even called for support from long-term competitor Holden.

"If they stop making the Falcon, Holden will suffer as well'' because it will mean the end of the V8 Supercars motor racing circus, Steve Li posted on Facebook.

"We'll have some crap front-wheel drive thing from the US, so even the Holden fans should show their support.''

The first Ford Falcon was introduced into Australia in 1960

[phillyc]

Originally Posted by csv8

Does Ford love Aussies back?

* Philip King, Motoring editor
* From: The Australian
* January 16, 2010 12:00AM

Hence the debate about what the Falcon will be. In other markets, Ford has a large car called the Crown Victoria, which is a front-wheel drive dinosaur that has little in common with the Falcon. Australian loyalists would much prefer an alignment with the Mustang, an American performance rear-wheel drive.

This is i'm sure a rehash of a story from last year. For someone who is the motoring editor. He should surely know that the Crown Victoria is RWD.

[csv8]

Yes he should !!! I often see errors in Drive, Cars Guide etc, and they are supposed to research the cars before writing the article.!!!!

[Road_Warrior]

Well, given how much the local media flipped out when the "ZOMG FWD FALCON TORESS 2015" story broke, I'd say Mr Newcombe has plenty of support.

[Nikked]

Anybody else think that the Taurus BS story might help Ford's decision to keep the falcon RWD?

Think about it, its not like anybody said "oh yay a taurus!"


...Market research would take note IMO....

[opto]

How boring to have the world market of one type of car in the medium size vehicle range.

Its like eating chicken every night,its the same all the time, no red meat.

Mullaly better reassess his OneFord policy, granted the design and manufacturing costs will be less but to have no variety in the market ?

[fromBAonwards]

don't know, but they do a damn good job at making great cars.

The new FG range is amazing!

[A-TEK]

http://au.news.yahoo.com/a/-/latest/...e-ford-falcon/

media still trying to proclaim falcon dead :

strange this also seems to be the same article Bob man has posted from the herald sun, so one media outlet generates the story then they all happily pliagerise(spelling) from each other

[Dave R]

Originally Posted by opto

How boring to have the world market of one type of car in the medium size vehicle range.

Its like eating chicken every night,its the same all the time, no red meat.

Mullaly better reassess his OneFord policy, granted the design and manufacturing costs will be less but to have no variety in the market ?

What you are suggesting is exactly what helped send Ford into financial strife and contributed to GM going bankrupt. Why is Toyota so successful? Because they practice the opposite of what you are suggesting. In each market Ford only offer one mid size vehicle - in Australia we have Mondeo, USA has Fusion. When you combine them, you save a billion dollars because you are developing one, not two. Add the fact that each market will only have one or the other, no "variety" is lost by combining them for all global markets.

I wouldn't be questioning any of Mullaly's policies, he is smarter than both of us combined; if Bill was still CEO Ford would have gone bankrupt long ago.

[irlewy86]

Mulally was the man who revived the Taurus nameplate in the US. He recongnised the value of an established name and hosed management for killing it. Yet people still speculate the Falcon nameplate won't be around in 2015.

[phillyc]

Originally Posted by irlewy86

Mulally was the man who revived the Taurus nameplate in the US. He recongnised the value of an established name and hosed management for killing it. Yet people still speculate the Falcon nameplate won't be around in 2015.

Primo post irlewy86. Mullaly was not a happy camper. He thought that was a big mistake. Hence he resurrected Taurus.

Mullaly won't kill Falcon, it had 35% and increasing, large car market share in 2009.

He has also given enough hints that Falcon & Mustang will be twinned.

[XRtowcar]

Taurus with a Falcon badge?

[csv8]

Originally Posted by XRtowcar

Taurus with a Falcon badge?

: :

[starkey]

Dont worry the falcon will stay. they would be very stupid to make it a front wheel drive. Look how good the old cressidas are how crap the Aurion,camry and avalon were. ford please pay attention aussie wont buy Fwd.

[fromBAonwards]

I am so much in love with Falcon that i am going to become boring and tell all my friends about Coyote variant that will come out this year , lest hope, at least what what i have learned from the forums here.

5.0L Coyote Powered FALCON FG , say FG MkII, i can not sleep!