Ford To End Local Production In 2016? Pipe Down (And Pull Your Head In)

Tim O'Brien | Jul 31, 2012

Musings from PPB Advisory partner Stephen Longley that the Ford Motor Company is likely to abandon production in Australia in 2016 are ill-considered and unfortunate.

Quite simply, he should know better. Insolvency firm PPB Advisory should not be associated with damaging speculative musings of this type which can have dire consequences for the operation and public confidence in a company named in this way.

The grave error of judgment, when an apparently 'informed' reputable source muses in this way, is that they can so easily become self-fulfilling prophecies. Even if they're totally wrong, and totally without foundation.

And they are just musings. Whatever the evidence Stephen Longley feels he has, Ford Australia has said nothing. At best, he would seem to be simply drawing a bow - he doesn't know.

Of course, no-one is pretending that things are all hunky-dory for Ford Australia's manufacturing operation.

The Falcon is stiffing in sales - last month, it's best for a while, it found 1431 buyers - and the Territory is doing ok, but not setting the house on fire. It managed 1800 sales for June.

And no-one is pretending that there's any certainty in Ford continuing to manufacture the Falcon and Territory beyond 2016. (Which is the expiration of its period of commitment to the Australian government in accepting taxpayer 'co-investment' dollars.)

But neither is it a foregone conclusion that its manufacturing operations here will cease.

Longley, whose firm PPB Advisory are court appointed receivers for a number of high profile companies, including Darrell Lea chocolates, Provident Capital, Clive Peeters, Australian Motor Finance and the Auto Group of car dealerships, is also reportedly managing the wind-up of a number of automotive components suppliers.

Longley told ABC Business, "My outlook is (that) over the next few years we'll see an exit of Ford from the Australian manufacturing environment."

He bases this view on information that some components suppliers are planning for a future without Ford - of which suppliers, presumably, he has some good inside knowledge given the activities of his firm.

"There will be, in my view, a reduction in the number of component suppliers in Australia as they need to compete competitively with global suppliers for that business with Toyota and Holden and obviously the flow-on effects from the reduced demand has resulted in an exit of Ford from the industry," he told the ABC.

But he doesn't know.

The problem with loose talk of this nature, from such a source, is that it can send Falcon and Territory sales into an accelerating downward spiral from which there is no return.

Healthy car sales of any brand require the confidence of consumers in the brand, in their investment in making a vehicle purchase, and in the residual value when it's time to sell.

2012 ford falcon ecoboost 01 g6e 03

What business is it of Longley's - from his position, in the company he represents - to set out to undermine the activities, consumer confidence, sales and profitability in one of Australia's key manufacturing companies?

Whatever its current position in the market, it is not time to ring the bells on Ford. While things in this competitive environment will certainly remain tough, a lot can change in four years.

Ford Australia may not have the resources nor internal company support to produce an all-new car on an all-new platform, but it may have the support - and we don't know - to produce a local version of an American model off an international platform, such as the Taurus.

This would effectively be a return to Ford's then strategy with the original XK Falcon in 1960; it was barely more than a slightly stiffened-up and strengthened US model of the same name.

And Ford Australia may yet continue with an all-wheel-drive SUV when the Territory is due for replacement. Once again off an international platform.

The fact that some suppliers are perhaps feeling the ground shake may simpy signal an intent that Ford is going to be looking for alternative suppliers. Much as Holden has done with the Commodore.

So who then does 'loose-lips' Longely think he is helping with his damaging speculative comments?

Certainly not Ford. Every lost sale from this exercise in kite-flying is another cut, another loss of blood, another wound weakening Ford Australia's local manufacturing operations.

And certainly not Ford Australia's workers. Lost sales equals lost jobs; perhaps Mr Longely might take a few minutes out of his day - if he can squash it in between his media duties - to explain to them the benefit of his contribution to the security of their futures.

And certainly not the hundreds of components supplies and their workforce who rely on a healthy local motor industry, and for whom the loss of Ford for some would mean disaster.

So, Mr Stephen Longely of PPB Advisory, who were you helping?

Next time you feel the same rush of blood approaching, pull your head in... (you might otherwise run the risk of looking like a complete nong).

- Tim O'Brien
TMR Managing Editor

Filed under: Featured, ford territory, territory, ford falcon, Falcon, manufacturing, News, ford, ford australia, industry, tim o'brien, editorial

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  • Buntz says,
    3 years ago
    Here, here. It's also Un-Australian to kick someone when they're down.
  • Dave says,
    3 years ago
    Very well said Tim.
    When i read on Facebook that "Ford had announced it was closing it operations in 2016" i couldn't believe my eyes!!!!
    I quickly searched every auto and news website i could to see if it were true and all i found was a bulls!!t article on the Herald Sun website about this idiot say Ford would close, with no substance to it!!!!
    I will be amazed if this idiots comments don't damage Ford even further
  • kennyg says,
    3 years ago
    Sorry Tim,

    You are wrong AGAIN! Ford is fair game, as are the other two manufacturers if they are taking tax payer money. The writing is on the wall for Ford manufacturing. You are trying to keep a dirty little secret a bit longer for a few more long boozey lunches and junket car launches from Ford.

    No manufacturer anywhere in the world would reinvest in Australian market large cars because there isnt a business case. Simple as that.
  • BadaBing! says,
    3 years ago
    Here we go again. Wa Wa! bleh

    No mention of FPV closing shop in the next 6-8months. No mention of another round of voluntary redundancy's.

    If Ford didn't have such *** after sales support and spent the time building a car right the first time, don't you think people would by more? Word of mouth a far more impactful then stupid ads of self parking cars. Great advertising campaign for Eco Boost too. Wow a few stickers on V8 Supercar (who watches that anymore anyway?)

    (/sarcasm) Nah, it's the media.... lets go on a witch hunt!

    It's Ford Australia's own fault for where they are. Plain and simple.
  • Brash says,
    3 years ago
    This sort of bull*** reporting is what killed Mitsubishi's local manufacturing.

    As for those who comment/complain about Ford and Holden getting handouts from the federal government, do your research. There is scarcely an automotive manufacturing plant anywhere in the world that doesn't have some sort of handout. In the US for example each state climbs over it's neighbours to effectively buy a plant in their back yard to keep their constituents employed. And the story is the same in Europe.

    Sure Ford Aust isn't a perfect company, and Dearborn doesn't seem to care that it's "One Ford" strategy is hurting all Ford outlets outside of the US, but this sort of reporting just keeps the thought in the general public's mind, and even those thinking of buying a Falcon will wonder "what support or resale will the car have when Ford aren't here anymore?" (because the ignorant and ill-informed will always see it as Ford pulling out of Australia alltogether, rather than just ending local production), which will lead to them spending their money elsewhere, which leads to this bull*** report being made self fulfiling prophecy.

  • 5valvepercylinder
    5 valve per cylinder says,
    3 years ago
    There is a sad underlying truth in it.. geographically we can't compete with a couple factories set-up in other parts of Asia, the large car sector in the price segment occupied by Falcon, Commodore is dying and is being replaced by the SUV's/ MPV's plus the growing demand for small and medium sized cars.

    The hand-out grant can only do so much to begin with, also it's still up to the Ford HQ in the US that finally makes the final decision.
  • Mitchell says,
    3 years ago
    Somebody should definitely notify Media Watch about this
  • Peter margetis says,
    3 years ago
    Well said regardless of brand whether Ford or Holden, How dare he put Australian jobs at risk.
  • Nicholas O'Brien says,
    3 years ago
    Decrease in sales is simply because the consumers don't want to wait nearly 3-4 months for their order to be built. I know because I sell fords at my local Ford dealership. The biggest problem Ford has currently is they take so long for and order to be built. I still have over 10 orders that my customers made back in February and I'm being told end of September. And I've lost over half because of the lack of faith the customer has and I don't blame them. The reason for the orders vary: some want manual with leather or some want a certain colour to which they are entitled to and they are 80% falcons and the rest rangers and yes the rangers are imported but even still... They even struggle to supply them. My favorite brand of car is Ford and always has been. But " Wake up Ford have a real look at the real problem. Start supplying the product you advertise and praise"! "yes they are brilliant products but your supply time frame is a joke"
    • Daggles says,
      3 years ago
      1 like
      Most other brands have long waiting times. For example anything from the German marques usually takes 6 months plus, with the majority of customers willing to wait just for a certain colour!
      I don't think this would be the sole reason for dwindling Ford sales.
  • offroader says,
    3 years ago
    Maybe Ford should show they are serious about the future and start by suing this idiot for damaging their brand to show they are serious about Australian car production.

    Then they should get some new ads for the Territory, because the current ones won't sell any cars.

    After that, make the Falcon lighter, smarter, more efficient and give it a better interior that is more high tech and engineer it to be sold in other markets or to be used as a platform for other vehicles.Easier said than done though.
  • Alex B says,
    3 years ago
    An American Taurus will not sell here in any viable numbers, and a front drive based SUV replacement will not replace Territory's sale numbers. These are cold hard facts. People who buy in this segment will be alienated by these vehicles and will resort to something else and many already have. People talk about Mercedes all the time as a benchmark well lets take a look, They make large rear wheel drive sedans that chew half as much fuel again compared to Falcon and Commodore however their sales have increased this year and last year, I wonder why that is? They package and market there vehicles very well, for that matter so do BMW and Audi and they all make V* rear wheel drive cars predominantly and that includes most of there small cars, even their Focus sized cars have 6cyl and V8 engines and performance. FORD, as a minimum, XR8 needs to come back in sedan and ute, Make a G8E as well as your G6E, Make a Territory V8 that is able to tow 3.5T so it compares to Jeep. Then repackage all these vehicles so the look bold and exciting and create some fun and exciting advets and run them like Toyota does every day and night and you will be number one again. It's just that clinically straight forward. Alex B, Western Sydney NSW.
    • OutbackOZ
      OutbackOZ says,
      3 years ago
      Alex, we all want manufacturers to build what we want. But its also gotta be viable too. You want a V8 petrol Territory and may be a hand full of others, it doesn't make i viable. There are many cars out there to suit everyone's needs, if it means you have to jump manufacturers, Not all manufacturers aim to dominate every segment.
      Plus to get 3.5t towing the territory would need a bottom up rebuild. Patrol will have a V8 petrol Patrol next year if thats what u want, but i dont think we will see them flying out of the show rooms. Have you thought of the Ford Ranger based SUV that should come out in the next year or two.
      I do like the idea of G8E, would be nice to see and XR8 once again, but i wouldn't hold my breath.
      As for the Jeep, the SRT8 is upwards of $60-78k plus on roads (roughly) i couldnt imagine the fuel consumption with 3.5 t behind it. as its 14.1lt/100km as it stands. You must have deep pockets if you like you V8 petrols.
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