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Tim O'Brien | Jul, 19 2012 | 31 Comments

The job losses announced this week at Ford Australia's Geelong and Broadmeadows manufacturing plants should surprise no-one. Least of all the Australian government.

The Falcon has a problem, so Ford Australia's manufacturing operation has a problem. The Falcon, its sales attest, no longer excites the imagination of buyers - it's as simple as that.

Australian car buyers, private and fleet, have moved on from large sedans. And that's a problem for each of our three local manufacturers.

The traditional 'aussie-six' big sedan has been supplanted by lifestyle purchases: by crossovers, SUVs, 4X4s and dual-cab utes. Many of these purchases, most in fact, are large vehicles, but not large sedans.

That's the reality, and that's why Ford has to 'right-size' its workforce.

In accepting $34million in government co-investment, Ford Australia committed to retaining its manufacturing operations here until 2016.

It would not, and could not, commit to making no adjustments to its manufacturing workforce over that period - such a commitment would be suicide.

Last month, in June, Ford notched up 1431 Falcon sales. In the same month Toyota sold 4308 Hilux pickups - twin and single cabs.

Nissan sold 3034 Navaras, Mazda notched up 1955 sales for its CX-5 (a relative newcomer) and the Territory, a light in the wilderness for Ford's local manufacturing operations, garnered 1800 sales.

For Falcon, worthy though it is, the market - now saturated with choice - has moved.

In June, imported vehicles captured 98,801 sales. By comparison, locally manufactured vehicles from Ford, Holden and Toyota captured 13,765 total sales.

Of course, Holden has a strong selling small car, the Cruze, plus a modest export program to bolster its operation.

Toyota, whose local Camry and Aurion are collectively behind both Holden and Ford in local market sales volumes, has reasonably large if not especially healthy export sales.

But Ford Australia has neither of these.

Globally, best practice vehicle manufacturing plants operate on a minimum 250,000 units annual output.

Holden, with maximum annual output from its Adelaide plant of 100,000 units, is, while very near its capacity, nevertheless managing to achieve best practice line-speeds and output.

Ford however, with 3850 sales for the the month of June for its Falcon, Falcon ute and Territory, is on a trajectory to an annual production of less than 50,000 units.

This, in modern car manufacturing, in such a competitive saturated market, is unsustainable in anything other than the short or medium term.

The Ford Motor Company, Dearborn, Michigan USA, is a global monolith with total annual gross revenues in excess of US$130billion across all of its operations.

Read that figure again, and think about it for a moment.

As we have commented before, Ford Australia will manufacture cars in Australia for precisely as long as it makes fiscal sense for Ford Motor Company to continue to manufacture here. And not a moment, not a heartbeat, not a nano-second longer. That's the reality.

No Australian government has a pocket deep enough to divert that boardroom and the decisions it will make about this unique little manufacturing outpost down on this side of the world.

So what of the Falcon? Does its position in the market reflect the quality, capability and value of the car?

Absolutely not. The current Falcon is, in our view, arguably the best large sedan ever engineered and produced in this country, and, pound-for-pound, remarkable buying value.

The front end of the Falcon is a sophisticated double wishbone set-up (virtual pivot control link), similar to that found in quality premium cars such as Lexus and larger BMWs.

The Falcon tracks superbly, and, unlike many European suspensions, is perfectly at home and effortlessly comfortable on rougher Australian roads.

The Ecoboost 2.0 litre engine is simply brilliant; it is one of the most modern, sophisticated and capable engines found anywhere.

And it can be found under the bonnet of the Falcon where it provides the eager performance and balance of similar-sized but far more expensive European cars like the Audi A6 2.0 TFSI.

The well-proven i6 remains as one of the better straight-six engines on the planet. Robust and strong, when combined with Ford Australia's liquid phase gas-injection technology under the bonnet of the Falcon EcoLPi, it provides small car running costs with uncompromised big car power and space.

With equally robust six-speed ZF transmissions, and comfortable well-trimmed interiors (if not the best available), the Falcon is a world-class large sedan which deserves to succeed.

It must perplex Ford that such a fine car loses sales to imported product that does not match the Falcon's quality of engineering, robustness nor on-road capability.

But such is the nature of buyer sentiment.

Of course, those of us who were there when the 1966 'Mustang-bred' Falcon XR appeared, and later the astonishing XY GT, will remember how these cars captured the imagination of the nation, and had young kids like me wetting themselves in anticipation of one day getting behind the wheel.

It didn't matter that those early Falcons were just US market Fords of the same name with a more robust suspension and some local styling and engineering tweaks.

Like the Kingswood and the Monaro, they were 'ours' - we loved them, lapped them up, had a nation divided into red and blue camps, were proud of them and proud of the achievements of the companies behind them.

Then, Holden and Ford absolutely dominated the market with the Kingswood and Falcon. Between the 'Lion' and the 'Blue Oval' and Chrysler's Valiant, they held in excess of 70 percent market-share.

But that was then. And there is no way back.

- Tim O'Brien
TMR Managing Editor

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