Ford rejected export help: Wikileaks

[Wretched]

Leaked cable shows no high-level interest in exporting Falcon and Territory.

Ford Australia refused government support to help it build the locally made Falcon and Territory for export, raising questions about its survival, a leaked diplomatic cable reveals.

The cable, released last week by Wikileaks, reveal that the Melbourne-based car maker had declined the help of Federal Industry Minister Kim Carr, who offered ''co-investment opportunities to create left-hand-drive cars for export''.

''[Senator] Carr is very worried about Ford's future in Australia. He told [the Consul-General's office] Melbourne he fears Ford will not succeed in attracting the necessary investment to update its aging product lines,'' the cable, signed off by former Melbourne-based US Consul-General Michael Thurston, says.
Advertisement: Story continues below

The cable, dated December 16, 2009, went on to reveal that separate talks with Ford's management ''provided us a different perspective of its future — it sees itself very much as part of Ford's global business and would be willing to make sacrifices for the good of the greater company''.

Speculation is already rife that Ford Australia is considering dumping the rear-drive Falcon when a new version is due in about 2014 or 2015 in favour of a US-made, front-wheel-drive Taurus sedan, potentially signalling the end of the locally made large car's five-decade production run.

Rumours also persist that the next-generation Falcon could share its underpinnings with the Ford Mustang performance car as the US-based company expands its One Ford policy of migrating new vehicles to a single global platform.

''By contrast, Holden views its Australian operation more as a standalone subsidiary,'' the cable says.

The cable reveals the US Consulate in Australia kept a keen interest in Holden's performance, and even learned that the Australian division of US car-making giant General Motors saw itself evolving as a niche player rather than a significant presence in world markets.

''Although Senator Carr would clearly like to see the three automotive manufacturers increase their export volumes, Holden plans to focus increasingly on the Australian market,'' it says.

''[Former Holden managing director] Alan Batey acknowledged a tension between Senator Carr's desire for greater exports and Holden's plans to focus more on the Australian domestic market.

''Batey believes, however, that Holden can best play to its strengths by focusing on niche exports such as providing police vehicles and high-end muscle cars to the US market.''

Before the 2008 global financial crisis, exports accounted for more than half of Holden's annual production.

However, the closure of the US export program and the winding down of its Middle East sales has hit its Elizabeth assembly line hard.

When the US export program was at its height, Holden shipped 36,500 rebadged Commodores to the US in a single year — about two-thirds of the company's total exports and almost a third of its total vehicle production.
The cable goes on to paint a more gloomy picture of Australia's car manufacturing future.

''Despite optimism from Australia's three automotive producers and a commitment by the Rudd government to support the industry until at least 2021, Australia's automotive manufacturing sector will likely continue to slim down in coming years,'' it says.

''There is a growing debate in Australia about what constitutes manufacturing versus assembling as discussions with Carr, Batey and [former Ford Australia managing director Marin] Burela have shown.

''Ford and Holden are moving toward increasingly assembling vehicles in Australia rather than manufacturing them in the traditional sense.

''While none of the three remaining manufacturers are looking to exit Australia now, all three envision slimmer operations, fewer employees and a focus on niche markets.''

A Ford spokesperson was unavailable for comment.

http://theage.drive.com.au/motor-new...l#commentStart

[kennyboy]

FOA can't export without support from Dearborn. Dearborn is insisting on the One Ford policy, common platforms to be built around the world. The Falcon & Territory are orphans that only Oz wants(?). Even if One Ford allowed for them (Falcon & Territory), the logistics of supplying parts & training to overseas dealers for engines that aren't sold anywhere else would be expensive.

[Chopped]

Ford US is choking Ford Aus. GM will do the same to Holden.

[Road_Warrior]

Originally Posted by kennyboy

FOA can't export without support from Dearborn. Dearborn is insisting on the One Ford policy, common platforms to be built around the world. The Falcon & Territory are orphans that only Oz wants(?). Even if One Ford allowed for them (Falcon & Territory), the logistics of supplying parts & training to overseas dealers for engines that aren't sold anywhere else would be expensive.

This is why they need to use global parts and powertrains instead of orphan stuff. However the article clearly stated that Broady declined the offer of assistance - FoA does have a degree of autonomy and I think its pretty clear they aren't interested.

[imugli]

It also states that Ford is seen as part of the Greater Ford World, whereas Holden is seen as a standalone entity. To me, that says GM are more likely to let Holden go than Ford are to let FoA go... Funnily enough, that's what we saw during GMs bankruptcy, where they basically said to Canberra provide a 200million line of credit or we'll sell to the Chinese...

As kennyboy said, there would have been no point to Ford Oz accepting the cash if Dearborn didn't want export market Falcons and Territorys...

[phillyc]

Kennyboy and Road Warrior are spot on. At the time GMHolden just copped a $200m hit from their failed exports to the US. But the biggest issue is the non-global engines and drivetrains. EcoBoost I4T and Coyote based Miami V8 in the Falcon, along with TDV6 in the Territory with the corporate 6R80 gearbox helps align them closer and closer.

[Polyal]

LOL how did they manage to make everything so rosy for GM. Its all old news.

[bobthebilda]

Originally Posted by Road_Warrior

. However the article clearly stated that Broady declined the offer of assistance - FoA does have a degree of autonomy and I think its pretty clear they aren't interested.

Doesnt mean FoA has a degree of autonomy at all. What it means is that the Head office is basically saying " we dont care what sort of assistance you are going to give us, especially if we have to put in $2 for every $1 of Government money".

If FoA had some say in the matter, they would have taken what assistance they could, and attempted to ramp up exports. Ford Head office, would have been thinking, why should we be spending money on a high cost manufacturing plant, to try and compete with our low cost exporting plants from thailand etc.

What the articles does say, is that politicians (and remember Kim Carr was a teacher before he become a politician (car expert)), probably dont have the expertise of running large companies like the CEO and CFO of Ford, do.

[jpd80]

Originally Posted by kennyboy

FOA can't export without support from Dearborn. Dearborn is insisting on the One Ford policy, common platforms to be built around the world. The Falcon & Territory are orphans that only Oz wants(?). Even if One Ford allowed for them (Falcon & Territory), the logistics of supplying parts & training to overseas dealers for engines that aren't sold anywhere else would be expensive.

FoA can't export without a workable business plan, this has been gone through at least four times in the 2000s
and every time, the answer comes back the same. look at Holden, the last disaster cost them $200 million.

Originally Posted by Chopped

Ford US is choking Ford Aus. GM will do the same to Holden.

Incorrect, Ford Australia has been given a very long lead, if Dearborn wanted Falcon gone, it would have done it years ago.
The them and us you think exists between divisions is simply not there, it's all one big engineering resource pool that
works on lots of different projects, FoA is involve with no fewer than four international projects atm...

Falcon has friends in high places but the sums for export don't work and the market for RWD cars in the USA
is now much lower as everyone mostly switches to mid sized FWD vehicles.

Originally Posted by bobthebilda

Doesnt mean FoA has a degree of autonomy at all. What it means is that the Head office is basically saying " we dont care what sort of assistance you are going to give us, especially if we have to put in $2 for every $1 of Government money".

If FoA had some say in the matter, they would have taken what assistance they could, and attempted to ramp up exports. Ford Head office, would have been thinking, why should we be spending money on a high cost manufacturing plant, to try and compete with our low cost exporting plants from thailand etc.

What the articles does say, is that politicians (and remember Kim Carr was a teacher before he become a politician (car expert)), probably dont have the expertise of running large companies like the CEO and CFO of Ford, do.

As above, the export plan was reviewed no fewer than four times in the 2000s and each time the answer cam back
the same, lots of red ink but unlike Holden, FoA weren't dumb enough to try exports anyway.

Funny now that Holden are trying it Ford's way and content to be a domestic manufacturer
with about 200 Caprice PPVs a month.......Pffft, why did they even bother...

[DanielXR8]

Originally Posted by jpd80

FoA can't export without a workable business plan, this has been gone through at least four times in the 2000s
and every time, the answer comes back the same. look at Holden, the last disaster cost them $200 million.


Incorrect, Ford Australia has been given a very long lead, if Dearborn wanted Falcon gone, it would have done it years ago.
The them and us you think exists between divisions is simply not there, it's all one big engineering resource pool that
works on lots of different projects, FoA is involve with no fewer than four international projects atm...

Falcon has friends in high places but the sums for export don't work and the market for RWD cars in the USA
is now much lower as everyone mostly switches to mid sized FWD vehicles.




As above, the export plan was reviewed no fewer than four times in the 2000s and each time the answer cam back
the same, lots of red ink but unlike Holden, FoA weren't dumb enough to try exports anyway.

Funny now that Holden are trying it Ford's way and content to be a domestic manufacturer
with about 200 Caprice PPVs a month.......Pffft, why did they even bother...

because the Australian car market is shrinking might be one reason. A market that on its own is becoming unviable for large car manufacturing. Another might be to keep Holden a profile in the most important market for Holden - the parent companies. I think you are way to dismissive of Holdens efforts. They have put up a fight.

[Bossxr8]

With the dollar over 1.05 they are probably better off not exporting ATM.

Bit hard for Ford to start exporting when they have no market to sell to.

Maybe once the ecoboost 4 goes into Falcon they might start exporting to countries like Thailand again, because they can't introduce a huge tax on cars with engines bigger than 3 litres like they did previously to kill off Territory imports, which basically killed the program overnight. Fair trade my foot.

[jpd80]

Originally Posted by DanielXR8

because the Australian car market is shrinking might be one reason. A market that on its own is becoming unviable for large car manufacturing. Another might be to keep Holden a profile in the most important market for Holden - the parent companies. I think you are way to dismissive of Holdens efforts. They have put up a fight.

Falcon based products actually span three market segments:
1) Large sedan
2) Mid Sized SUV
3) 2WD Pick Up/Cab Chassis.

I am dismissive of Holden's export plans, do you realise that between 2005 and 2010,
Holden lost big time on exports as was reflected by their annual bottom line.

It was only after thay decided to be mostly domestic producer with a dabble in Caprice PPV,
a car that cost $200 million to develop, so far the best month has produced 260 sales....hence my skepticism.

On the other hand I agree with Cruze local production, people today are after smaller
more well equipped fuel efficient cars....read not base model strippers, something
Ford doesn't get and why their Focus plan fell over big time, it was based on an erroneous
notion that approx. 65% of Focus production would have been base models when in fact
the LV Focus aunch proved that around 65% of sales were Zetecs and Ghias with LX being hard to sell..

Ah well, water under the bridge...

Falcon platform is profitable, especially with a re-energised Territory, it's not about sales so much
as it is about profit per sale, something Ford is controlling extremely well.

[jpd80]

Originally Posted by Bossxr8

With the dollar over 1.05 they are probably better off not exporting ATM.

Bit hard for Ford to start exporting when they have no market to sell to.

Flip that around and imported parts are now much cheaper than three years ago,
that is certainly adding to FoA's bottom line and the business case for a local car with imported parts.

Stuff like V6 engines and in-house 6R80, even ZF are now 30% cheaper than in 2008..

Maybe once the ecoboost 4 goes into Falcon they might start exporting to countries like Thailand again, because they can't introduce a huge tax on cars with engines bigger than 3 litres like they did previously to kill off Territory imports, which basically killed the program overnight. Fair trade my foot.

Possible but the potential for EcoLPI and Ecoboost I-4 will bring more fleet sales and new customers respectively,
that has to be seen as strengthening Falcon's base, remove Fairlane/Stationwagon, substitute those markets
for I-4 turbo product that was sponsored by the government and bingo, we're back baby...

Run the numbers per month
Falcon 1800
Falcon LPG 500
Ute 700
Ute LPG 300
Territory 1700
Ecoboost...500

That's about 5,500/month.....a lot of potential there....



I think Territory diesel might be a great export, good fuel economy and Titanium drips class.

And that's before we talk about Mondeo diesel 5-door and Staionwagon, a great
alternative to spending near $300 million on a falcon wagon...

[Road_Warrior]

Originally Posted by jpd80

Ecoboost...500

I'm thinking that Ford will be rather hard done by if they are only moving 500 Ecoboost Falcons per month.

[jpd80]

Originally Posted by Road_Warrior

I'm thinking that Ford will be rather hard done by if they are only moving 500 Ecoboost Falcons per month.

All my figures were deliberately low ball to demonstrate how a diversified product/engine range
is essential for maximising sales, I feel certain that Ecoboost will do much better but even if it doesn't
those monthly figures all spell good news for Ford..something the motoring scribes aren't looking at.