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Tim O'Brien | Aug 28, 2008

THERE ARE THREE signs - shining like beacons and all pointing one way - that Ford Australia is at a crossroads.

First sign: the surprise resignation of Bill Osborne. I have met him, chatted with him, been present at a number of functions where he has spoken. He was a man who gave every indication that he was comfortable in his role, said he was enjoying Australia, and had the air of someone aware of the scale of the challenge but confident and at ease with the task ahead. He spoke of Ford Australia's future like he was part of it.

There is thus more to Osborne's departure than meets the eye.

Second sign: the arrival in Australia of US Ford Boss, Alan Mullaly, for meetings with both Federal and State Governments and bureaucrats, and to meet senior Ford Australia staff (and, one must assume in the light of Bill Osborne's resignation, to begin moving deck-chairs in senior management).

ford-territory

Mullaly's appearance is not as big as the sudden appearance of the Queen or the Pope, but it's up there. The heads of the US automotive giants don't swing around the world lightly, least of all to a minor outpost producing a small number of unique cars - made nowhere else in Ford's global operation - exclusively for a small domestic market (throw NZ in there).Alan-Mulally-Ford

There is also more to Mullaly's appearance than meets the eye.

Third sign: the announcement last year that Ford Australia would begin manufacture and assembly of the Ford Focus from 2010. The real import of this announcement was all but lost on the motoring media.

So where are those three signs pointing, and what does it mean?

This is what it means. We will never see an all-new model Territory or Falcon. We may, if we're lucky, see a facelift - nothing more - before the curtain falls on these uniquely Australian Ford cars.

We will see a replacement of one of these models, and one only, with assembly and some manufacture here. It will most likely be a replacement for the Falcon, most likely sourced from Ford's global stable, most likely offered in both V6 and diesel, most likely front wheel drive with AWD option, quite possibly based on the next Ford Taurus platform (with Ford Australia, no doubt, involved in its development).

Ford Australia does not have the capacity, nor will it see the investment dollars necessary, to produce three models, from three production lines.

falcons-fg-three

So, count the Focus, one; the global ‘Falcon’ replacement, two. We will certainly lose assembly and manufacture of a third model. The announcement that Ford Australia would produce the Focus deleted - in the same breath - the Territory.

The size of the local market does not support the investment required for the tooling, let alone the hundreds of millions of dollars in design, engineering and product development for three locally-manufactured Ford Australia products. As all automotive manufacturers increasingly share product development, engineering and design costs across their global operations, the case has disappeared for the development and production of indigenous products for exclusively indigenous markets

Is there, then, salvation for Ford Australia in export? No, the horse has bolted for Ford. Toyota and Holden succeeded in establishing their bridgeheads in export markets when the Ausdollar was barely 60cents to the USD (it fell to 48cents in April 2001). Furthermore, Dearborn - Ford US - has 'like' established products in markets Ford Australia may potentially have targeted (like the Ford Victoria in the Middle East).

First VE & WM Exports

The irony in all this is that both the Territory and the Falcon are superb vehicles. But they will become victims of the times. A decade back, few foresaw the relentless rise and rise of China as an automotive manufacturing powerhouse; few foresaw that the barrel price of oil would quadruple; few Australians foresaw the resources boom taking the AUD to near-parity with the USD; few foresaw that automotive giants GM and Ford would be teetering on the brink of bankruptcy; and few could have imagined the scale of the meltdown in financial markets and stock values.

These facts of our recent history have left Ford Australia, and a financially wounded Ford US making decisions on its future, nowhere to turn for its dogged Australian operation.

If Falcons and Territories were bolting out the doors of Ford showrooms, and Ford Australia was riotously profitable, it may be different. But they’re not.

So, get used to the idea. We’ll lose them both.

falcon-driving-away-fg-xr6t

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