Ford To End Local Production In 2016? Pipe Down (And Pull Your Head In) Photo:
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Tim O'Brien | Jul, 31 2012 | 13 Comments

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.

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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

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