Automotive industry assistance

[BroadyFord]

Given that we're about to endure another federal election, I thought it might be worthy to discuss the implications for the automotive industry, especially under a new government led by Tony Abbott. I'd just like to point out that I'm not being partisan in terms of political parties - all I'm trying to do is state the facts as they are.

Car industry funding as it stands:

Presently, there is around $5.4 billion available to car-makers up until around 2020 to facilitate plant upgrades and other investment necessary to ensure the viability of the industry going forward. This funding, known as the Automotive Transformation Scheme (ATS), has been accessed by all three manufacturers for future vehicles and products. The Gillard Government has committed to retain the current funding package in its entirety until 2020, when it's hoped the industry is able to become self-reliant.

The Coalition, however, has said it will cut $500 million from the ATS between now and 2015 (leaving $1 billion available to manufacturers until 2015). Additionally, the Coalition has (as yet) not committed to any further funding beyond 2015. It's important to note however that they also haven't committed to axing funding after 2015 either.

Implications:

Given that both Toyota and Holden have made investment decisions that should see production through to 2020, it's important to analyse this scenario from Ford's perspective. Having examined this scenario in my mind, the bottom line is: I'm worried.

As most people here know, Ford is due to end production of the current Falcon in 2016, leaving question marks about what will be produced at Broadmeadows beyond that time frame. Uncertainty about the Coalition's policy combined with the general feeling of uncertainty that elections bring for business leads me to believe that Ford will hold off making any decision until after September. One can assume that Ford have indeed not yet made any decision given that the plan to locally produce the Ranger was recently scrapped and the company is now back to square one.

To this end, a decision after September would leave a three year gap between an announcement and production (if any). In my opinion, this is the absolute minimum lead-time that would be required for any new vehicle and in a normal world, Ford would be in discussions with the government right now about securing new investment. However as the government has confirmed Ford have not approached them to discuss funding, coupled with the likelihood of a new government which, as yet, has no policy beyond 2015, it's very hard to see how Ford would be able to make a decision on a Falcon replacement and secure funding by the end of the year. Indeed, like most businesses, I wouldn't be surprised if Ford have put any investment (or shut down) decisions on hiatus until after the election due to all the uncertainty.

What are your thoughts?

[ryeman]

I understood Ford's intention all along was to do the high value clean sheet design of the Ranger in all its guises, with the intention of actual production in Thailand due to the FTA btw Oz n Thailand .
Tony has no more affinity for Vic/SA vehicle industry (or any other) than Howard.
If it was based in the WESTERN SUBURBS OF SYDNEY it would be a priority!

[Road_Warrior]

Originally Posted by BroadyFord

As most people here know, Ford is due to end production of the current Falcon in 2016

Really?? When was this announcement made?

[BroadyFord]

Originally Posted by Road_Warrior

Really?? When was this announcement made?

CURRENT Falcon. Ford have said themselves the current Falcon will run through to the end of 2016. Whatever happens after that - another Falcon, something else or nothing at all - remains to be seen.

[Road_Warrior]

Originally Posted by BroadyFord

CURRENT Falcon. Ford have said themselves the current Falcon will run through to the end of 2016. Whatever happens after that - another Falcon, something else or nothing at all - remains to be seen.

'Current' means the FGII and that is the only Falcon model that is current. Ford have already said a dozen times there is a 'new model' due in 2014 (which is an MCE of the existing platform) and if scumbags like Dowlface and Jiz Spanks think they are spending all this money on design, engineering and development for the MCE for only 2 years worth of sales, they have rocks in their heads.

But now we're off topic...yes the Federal Election may now be in play with a decision on Ford's longer term plans...

[Joe5619]

Originally Posted by Road_Warrior

'Current' means the FGII and that is the only Falcon model that is current. Ford have already said a dozen times there is a 'new model' due in 2014 (which is an MCE of the existing platform) and if scumbags like Dowlface and Jiz Spanks think they are spending all this money on design, engineering and development for the MCE for only 2 years worth of sales, they have rocks in their heads.

But now we're off topic...yes the Federal Election may now be in play with a decision on Ford's longer term plans...

I think you are getting to touchy for no reason. The current (or 2014 updated one if that keeps you happy) Falcon is due to end in 2016. This might get extended out for 6 or some months, but that is it. Ford themselves have already confirmed this. We can only go on what Ford have said, this part is fact!! If you need proof then go to this topic http://www.fordforums.com.au/showthr...17#post4555117 & look at post number 357 from Fords own PR person Sinead Phipps

It could very well become an election issue. I waiting to hear what the lib's view point is on this matter. They have made so pretty big comments in the last 12 months without providing their own view.

[xisled]

Originally Posted by Joe5619

I think you are getting to touchy for no reason. The current (or 2014 updated one if that keeps you happy) Falcon is due to end in 2016. This might get extended out for 6 or some months, but that is it. Ford themselves have already confirmed this. We can only go on what Ford have said, this part is fact!! If you need proof then go to this topic http://www.fordforums.com.au/showthr...17#post4555117 & look at post number 357 from Fords own PR person Sinead Phipps

It could very well become an election issue. I waiting to hear what the lib's view point is on this matter. They have made so pretty big comments in the last 12 months without providing their own view.

All that means is that the Series released in 2014 will end, this could mean a mkii series, it may continue as nothing happened, could see a new falcon all together released, could also mean the end to Falcon. It is not proof Falcon will end.

[Resurrection]

Originally Posted by Road_Warrior

Really?? When was this announcement made?

It is the worst kept secret.

[tranquilized]

It think you've summed up the situation pretty well.

In the event of a new government I would be a bit worried for the local auto industry. It goes against the right wing neo liberal ideology for any government to interfere in any way with business and the markets, so one would expect major cuts to the current funding arrangements.

[SB076]

Originally Posted by tranquilized

It think you've summed up the situation pretty well.

In the event of a new government I would be a bit worried for the local auto industry. It goes against the right wing neo liberal ideology for any government to interfere in any way with business and the markets, so one would expect major cuts to the current funding arrangements.

Its hard to say one party may increase funding arrangements but at the same time increase costs to organisations, another party may decrease funding but decreases costs to organisations - As an election has been called we might find out some policy detail in the future which may clear things up.

[Bossxr8]

Tony Abbott recently said he wasn't against industry funding, as long as its targeted properly.

That at least an improvement over what's been implied in the past.

[olfella]

OK. Holden has just announced sponsoring footy etc. Now how can a company cry poor and ask for handouts then splurge on a big sponsorship deal? I understand they have to advertise but (to me) this is a bit over the top

[ryeman]

Football, meat pie and H..... Cars?

[BHDOGS]

hes already promised to cut the money parents receive for primary and high school kids and delete the super incentive so people on 35000 a year will be 500 dollars a year worse off so hes already lost my vote but hey hes getting rid of the carbon tax so no need to worry thats a couple bucks saved lmao.

[ryeman]

George Pell's rep!
Go for dogma every time, sure beats inconvenient scientific facts .....?

[Luke Plaizier]

If it's the timing that's the issue, then relax a little bit.

The BA lasted from 2002 to 2005, BF from 2005 to 2008. The FG has had a longer life, lasting from 2008 to now, with the update expected in 2014.

If the updated Falcon launches in 2014, going on past history, a short 3 year lifespan would see it last until 2017. An FG lifespan beyond that. Also keep in mind that the updated Falcon and the next Mustang release appear to be synchronising in 2014.

If Ford can find a way to keep local manufacturing going beyond 2016, then the development period of a new RWD platform is still within the realms of realistic product renewal timelines.


Lukeyson

[Road_Warrior]

Originally Posted by Luke Plaizier

If it's the timing that's the issue, then relax a little bit.

The BA lasted from 2002 to 2005, BF from 2005 to 2008. The FG has had a longer life, lasting from 2008 to now, with the update expected in 2014.

If the updated Falcon launches in 2014, going on past history, a short 3 year lifespan would see it last until 2017. An FG lifespan beyond that. Also keep in mind that the updated Falcon and the next Mustang release appear to be synchronising in 2014.

If Ford can find a way to keep local manufacturing going beyond 2016, then the development period of a new RWD platform is still within the realms of realistic product renewal timelines.


Lukeyson

Exactly. And you can count on a MkII update along with that.

The 2016 crunch point revolves around Euro V emissions compliance for the Falcon's engines.

[Agile]

Local radio here in Adelaide was discussing this issue yesterday in light of Holden backing Collingwood to the tune of 3 mill. John Carmello from the relevant union had some very enlightening FACTS about Australian government support of the vehicle building industry . ALL other nations subsidize their car industries a whole lot more than here in Australia.
Please dont quote me on the exact figures, the radio was on in the background with a compressor and a power saw going full tilt.
It was something like 5 to 1 when comparing Aus with USA. This following report needs to be out there for all to get their minds around. Economic Rationalism has gone WAY WAY TOO FAR !!!!!!!
Senator Carr cited a new report that rebuts claims by the OECD and Australian think tanks that Australia's car subsidies are among the highest in the world. According to the report, commissioned by the car makers from the Sapere Research Group, Australia's subsidies amount to $US18 ($A17.4) per car worker per year, compared to $US90 in Germany, $US96 in Canada, $US147 in France and $US334 in Sweden.
Two years ago, the OECD assessed Australia's subsidies as second only to Sweden.
Senator Carr attacked Mr Abbott for pretending to be the champion of the blue-collar worker but refusing to guarantee that car subsidies would continue.
''Mr Abbott has made a great play of putting on the fluoro vest and going from factory after factory expressing sympathy with the struggles that blue-collar workers are facing. Now, he's … actually got to make a commitment and appreciate the reality of economics, not the theory.''

Read more: http://www.theage.com.au/national/ca...#ixzz2JgqXyBOq

[DRU842]

The problem with any Government industry support is it unlevels the playing field for others, around investment & employment.
BTW the flaw in the non-OECD assessment would be the countries compared are NOT the ones exporting cars to Australia in any great number.

[mik]

if i`m not mistaken the price for heavy transport fuel cost(RE : Carbon Tax) goes up after the election july 2014 by 6.8 cents per litre, which does`nt sound like much , but if your an operator putting in up to 700/800 litres per day for a single truck that works out to a lot of cost to be passed on to industry, of course it will flow on to cost of living too.
more pain for manufacturing ??