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

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.