Hmmmmm... Heads been doing OT on this one.
No surprise, and dont see it as a news flash considering they are talkin 2016 onwards, but surely Ford could create something Australians have been crying out for for years??? Not a 4cyl falcon... Something... So they could at least sell here and export elsewhere.
And what about spares for older fords that are only made in AU..
Car industry prepares for Ford exit
PUBLISHED: 15 hours 31 MINUTES AGO | UPDATE: 2 hours 49 MINUTES AGO
Companies and advisers involved in the car industry have begun talking openly about Ford, the No.?3 car maker, quitting local production in 2016.
Ford’s demise is seen as inevitable and suppliers are starting to factor it into business plans that are increasingly focused on product and geographical diversification.
The company recently slashed production to about 33,000 cars a year and laid off 440 workers.
A partner with PPB Advisory, Stephen Longley, who has acted as receiver to numerous faltering car parts suppliers, yesterday became the first to mention the unthinkable when he said Ford was finished as a local manufacturer. “It’s the elephant in the room, it is just not talked about openly,” Mr Longley said.
“The components industry is saying it is a foregone conclusion.”
Writing exclusively in The Australian Financial Review today, economist and former Reserve Bank of Australia board member Warwick McKibbin warns that the high dollar, the carbon tax and high labour costs are driving rapid adjustment pressures on manufacturing that require Productivity Commission scrutiny. “Sectors that have rigid labour costs such as the automotive industry find it difficult to adapt,” he writes.
Mr Longley, who is receiver for APV Automotive Components, said components makers should be working with Ford on a new model for 2016 but this was not occurring.
He was joined by components makers which either have written Ford off or who talked openly about life without Ford.
Ford recently received $34 million from the federal government and further cash from Victoria to continue making the Falcon and Territory in Melbourne. However, sales have plunged to such a low level that few believe Ford can justify new investment, even with government help.
Director of automotive and defence manufacturer Abcor Group, James Kaias, said his peers in the components sector believed Ford would close as the Falcon came to the end of its life.
“They are going to be closing within two to three years,” said Mr Kaias. “That is the consensus. I think it is pretty obvious.”
Ford is one of three remaining car makers in Australia after Nissan left in the early 1990s and Mitsubishi ended local production in 2008.
A spokesman for industry minister Greg Combet declined to respond to “speculation”. “However, it is important to note that the government’s $5.4 billion New Car Plan will provide support for the automotive industry out to 2020, including through the Automotive Transformation Scheme, which supports production of motor vehicles and engines and for investment in R&D, plant and equipment,” the spokesman said.
A Ford spokesman said the company faced challenges over the next four years. “Ford Australia has been consistent in saying that the actions we’re taking to ‘right-size’ our business and be as efficient as possible .?.?. will ensure continued relevance for our local vehicles. We will use that time to develop our business case.”
Even Ford’s own suppliers are canvassing a future without the company and speeding up restructuring and diversification. The managing director of Axion Precision Engineers, Jim Grose, said more suppliers would go to the wall if Ford closed.
He supplies parts to both Ford and Ford performance vehicles. “A lot of companies don’t know how they are going to survive,” Mr Grose said. “Things are going to get tighter and tighter. You need a certain level of turnover to make your company viable.”
Receivers McGrathNicol this week announced CMI Industrial would close two components plants with the loss of 119 jobs.
Diver Consolidated Industries chief executive Jim Griffin said he was rapidly restructuring his business after winning contracts to provide automotive heat shields to BMW. “But not everyone can do it,” he said. “You need to have enough working capital.”
PPB’s Mr Longley suggested the federal government could modify a scheme that guarantees employee redundancy benefits after companies collapse. Funding before collapse could be used for restructuring that would save jobs and businesses.
Economist Nicholas Gruen, who helped write the government’s original car plan, said Ford was doing a “Mitsubishi shuffle”.
“Their global parents are not really thinking of their Australian operations as any important part of their global strategy,” he said.
With the latest cutbacks, Ford production is 148 cars a day – about twice Mitsubishi’s before it closed.
In Mitsubishi’s final days, South Australian government funds came with the promise they would be paid back if the company closed. However, it is understood no guarantee was obtained by the federal or Victorian government when they last backed Ford.
