Ford Australia Drops Axe On Falcon And Territory; Production To End 2016 Photo:
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Tim O'Brien | May, 23 2013 | 15 Comments

After more than fifty years of manufacturing at Campbellfield, and more than eighty years of manufacturing vehicles in Australia, Ford Australia has now made the announcement everyone expected: it’s to shut-down its Australian manufacturing operations in 2016.

That date brings to end the Australian Falcon and Territory, and the i6 six-cylinder engine.

Citing challenging market conditions, Ford Australia CEO Bob Graziano said today that Ford Australia was unable to continue to manufacture locally if it was to serve “Australian customers with the very best vehicles that deliver cutting edge technology at an affordable cost”.

The announcement today will result in the loss of around 1200 jobs in Ford’s Broadmeadows and Geelong manufacturing plants.

“We know this announcement is very difficult, especially for our employees,” Mr Graziano said. “Providing support to those in our team whose roles will be affected is a key priority for us during this three-year transition period.”

As part of this announcement, Ford today released its FY financial results, posting an operating loss of $141million for the 2012 financial year.

This follows a loss of $290 million in 2011. In the past five years, Ford losses in Australia have climbed to a total of around $600million.

Of course, no-one expected anything other than red ink on Ford Australia's ledgers for the past financial year.

You can’t make money selling cars if people are buying something else: over the past year, Ford Australia’s manufacturing output for the Falcon and Territory dropped from 209 vehicles per day to 148 vehicles per day.

Sales of the Falcon are the lowest they have been since the very early days of the model’s release onto the Australian market with the XK Falcon in 1960.

Back then, and for the next 35 years, the car of choice for Australian families was a sedan, with a boot, and loping six-cylinder under the bonnet.

How much we’ve changed. Sales of the Falcon are tracking to just 10,000 units for 2013 (with 717 sales in April), and sales of the Territory tracking to just 15,000 (1260 April sales). These results are on top of years of declining market share.

Ford of course, on the receipt of a $34 million Government assistance package in July last year, committed to the Australian Government to continue manufacturing to 2016.

It was never likely to extend that date. It has a boardroom in Dearborn Michigan to report to.

Ford, across its global operations, has an annual turnover of more than US$140billion.

And certainly, while we might wish it were so, no Australian Government has a pocket deep enough to divert a boardroom of that size and influence.

The Falcon and Territory were orphaned in a company with a global product strategy of ‘One Ford’ – with products, platforms, engines and technologies shared across and common to all areas of its global manufacturing operations.

And while this announcement and these job losses are another blow for Australian manufacturing, and will result in many more hundreds of downstream job losses for components and parts suppliers, this day has been a long time coming.

The writing was on the wall for the Falcon and Territory with the announcement of the retention of the i6 engine. That meant, five years ago, that there was no intent to develop an indigenous platform capable of accepting Ford’s new range of V6 petrol engines.

Falcon and Territory – perhaps the best cars ever produced by this country – have found themselves out of step with the parent, out of favour in the market, losing money and simply out of time.

MORE: VFACTS - Ford, Holden: A Tale Of An Australia Lost.

- Tim O'Brien
TMR Managing Editor

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