Ford to cease local production in 2016

[Agno]

http://theage.drive.com.au/motor-news/ford-confirms-plant-closures-20130523-2k22c.html

 

Today is a very sad day for the automotive industry and enthusiasts alike.

[RB30X]

Sad yes, but its a sign of things to come.

 

We the tax payers have been funding this industry via the government for years.

 

It doesn't make sense to keep giving someone $10 so they can turn it into $11.

 

Australian car makers cannot make cars in Australia for the price they do it overseas.

 

Holden will be next. Currently offering 0% finance and overall prices 30% lower than previous years. This has already had a huge toll on the second hand market with 2010-2013 model Holdens or HSV's loosing 30-40% value in a matter of months.

 

[PZG302]

Australia has one of the lowest taxpayer subsidies for the car industry in the world and we are also one of about 15 countries with an industry mature enough to produce a car from a clean sheet of paper to the final product.

 

It is a sad day for manufacturing in this country, we are becoming a second world country with the ongoing cuts to R&D and higher education over the last 30 years, manufacturing disappearing from our shores and the only thing that we do sell overseas is dirt that will run out one day leaving us where?

 

Whilst we as a country have embraced globalisation and the free market unfortunately it has been largely one way, even the free trade agreement with the US sees us screwed over, the FTA with Thailand is scary when looking at the car industry in isolation, 5% tariff, if that on cars manufactured in Thailand coming here and 50% tariff plus ridiculous local taxes on our cars going over there. The few territories that made it to Thailand were the equivalent of near double what we pay here.

 

There is more to play than just the government here, in Ford's case serious mismanagement from the US side of things and a very poor job of marketing has spelt the death nell for Ford. Holden may survive, and I hope they do to keep the industry alive here, but depending on the flow on effect for the suppliers this may be the thin edge of the wedge and we could see all production from Holden from Holden and Toyota move offshore in the next 10-15 years.

 

On the bright side, the new FG Turbo ute I'm about to order will be another investment for my retirement along with my charger.......

[Agno]

Exactly right PZG. I'm sick of hearing about people complaining about subsidies to automakers, especially when you compare them to the tax concessions and rebates given to the mining industry!

 

We the tax payers have been funding this industry via the government for years.

 

It doesn't make sense to keep giving someone $10 so they can turn it into $11.

Let's get the facts straight. Ford has been given $1.1 billion in total from Australian Governments since 2000 and in return invested over $3.3 billion. Then factor in business and sales taxes on components, wages and car sales and it's safe to say that Governments have gotten their money back.

 

I used to have a fantastic powerpoint presentation from GM Holden from when I worked there that broke down Government investment/tariff barriers country by country and it made for some interesting reading but unfortunately I don't think I have it in soft copy anymore. It's already been said but Australia has the LEAST protected automotive industry out of all of the countries in the world that make automobiles. If you want a high tech and high value industry like auto manufacturing, it doesn't come free. Especially when we live on this big ol' island miles away from other global markets.

[dat240z]

Its a simple case of wrong industry for our economic climate and conditions. People in Australia cant demand high wages/condtions and still expect low priced prodcuts. The government should instead focus on industries which are applicable to our situation. Resources, food production etc.... Its been a long time coming, but in reality, should have happened decades ago

[PZG302]

Germany still has a very highly industrialised society with high wages like here, the big problem is the limited size of the market here compared to the rest of the world for most of our products. This has been exacerbated by successive governments rushing towards a free market economy whilst our trading partners have not done the same, making our products not viable for export due to import tariffs.

 

Resources isn't really a good long term solution for us as the dirt is finite, yes it will take a long to dig it up but once it's gone it's gone. Food production is limited as the amount of arable land we have is under pressure from mining and CSG now, with some scary ramifications if shit goes wrong.

 

We as a country have chased the government dollar for baby bonuses negative gearing McMansions and other white collar welfare at the expense of government spending in R & D for high tech industries. An example is solar panels, 20 years ago the UNSW led the world in it's solar cells for power production efficiency, this is now out the window as the research budgets have been slashed. The CSIRO is a shadow of its former self as are many other government scientific departments.

 

Whilst Ford's pulling out of Australia is a sad thing a lot of the reasons are due to Ford's mismangement in the US of the Australian arm in terms of not wanting Australia's input or products as the US could do it better, hence whilst the falcon had one of the better IRS around the same year mustang still used leaf springs and the Victoria (US large sedan) was still a body on chassis design you could trace back to the 50's. An example of internal Ford dramas was the manufacture of the Focus was supposed to be at Broadmeadows, at the last minute Ford US pulled the pin and decided t build them in Thailand, the next manufacturing centre for Ford will be India.

 

Unfortunately this also means that Holden and Toyota are now under pressure.

 

Whilst we are expensive, we build quality and should be pushing that. In my last job I won plenty of work even though I was not the cheapest, I was however the best value for money offering value add benefits my competitors could not.

[NZeder]

Car manufacturing was killed off many many years ago here in NZ it is not just the assemble plant employees that will loose their jobs it is all the supporting industries also. Exhaust suppliers and their warehouse staff, light suppliers etc companies like PBR, DBA will also feel this when the day comes.

[Sirpent]

Yup I'm still lurking about and thought I would weigh into this one

 

It has to be said as it has been that Dearborn in the U.S. killed the Falcon and all it had to promise, while Detroit saved the Commodore, the following is an insight I got a few years bask from a ford insider.

 

When the VE platform was being developed before the GFC hit, Holden was quick off the mark to announce that they had spent $1.5 Billion on its development, in actual fact, it wasn't all Holdens investment, GM pumped in $600M and Holden the remainder, the reason you ask? well without the money out of Detroit Holden was going to struggle making the VE reality, the U.S. investment was purely to homoligate the VE to Left Hand specs for export to the US and Middle East and to form the future platform for the Comaro, the shared platform of the VE LH, RH drive and Comaro was code named the Zeta platform, it was a bold move that paid off.

 

Meanwhile, Dearborn was talking of a shared platform for Mustang and Falcon and as a replacement for the Crown Victoria, the FG was all on its own, Ford Australia was on its own and the development costs after the failed AU and then the saving grace BA-BF were clearly on Ford Australia's shoulders with the promise that if they pulled it off that FG would be the next and only rear wheel drive platform moving forward.

 

What Ford managed to do with what they had was nothing less than miraculous, the first pre production FG mules where shipped to the US and underwent a month of testing and evaluation not only by Ford but also by major buyers such as some of the larger Police departments, and guess what, it was considered superior to anything they had seen come out of Ford on any corner of the planet, FG was set to have a bright future, but then politics got in the way.

 

The Crown Victoria was a similar deal to the old Cleaveland and Windsor motors of decades back built across the US and Canadian borders, it would mean a shut down of production across two plants in 2 countries, to add to the pain, the huge size of spares carriedand the feed suppliers to the program was going to cause enormous problems, so FG LH drive vehicle plans were still born as a result, the FG to Ford US was like the Tucker was to the big 3 manufactures in Detroit decades earlier, it was a massive threat.

 

So Ford Australia pulled off the impossible, was promised the world, and was dumped as a result, the tragedy here almost of Greek proportions is that recently Holden shipped across the Statesman as an alternative to the Crown Victoria, seems Ford US was outplayed by one of its own from across the pond in the end, nor by a GM cousin from down under, but rather rather itself and its inability to recognise that Australia could do it better be it FG or in the end a VE variant.

 

And the last words I have are for a certain Mr Jack Nassar, "You Tool" that's another fine mess you got us into 16 years after you signed off on AU, rest in peace Falcon, you did us proud.

[gav240z]

This is all very interesting and sad to see at the same time. I have a feeling this could ripple down into other areas also. I for 1 am shocked at property prices in Australia and I think this could have an impact on properties if people are out of work and foreclosures come in the market could get flooded with property for sale and then things might tank.

 

I've been looking at the option of buying a property back home, but can't help but feel it's a bubble about to burst. Then again maybe I'm over exaggerating things?

 

It would suck to leave recession Europe and come home to recession Australia :S

[Scottz]

Recession, recession, recession.......... or not?

According to the government we did not have a GFC in Australia and the incentives paid out by the government were all about making sure we had no GFC. I reckon it was just a lot of vote buying myself.

Reality is we have lived of the Chinamans back when once upon a time we lived off the sheep's back.

Subsidies never work and never last. Wether it's for wool, wheat, bacon, steel or cars...they have all failed. Using government revenue to prop up an industry has merits, especially when you are kick-starting a new industry. But the subsidy is suppose to be a helpful incentive for the short term, not for ever and ever.

I love Ford and wish them success, however the car industry in Australia is a very mature business, it is not a newbie, and if it can't stand on it's own 2 feet after decades and decades of government, industry and people support, it deserves a burial.

RIP Mr Ford. We loved ya.

[dat2kman]

High wages,

High retail costs,

High overheads

Increasing cost of raw materials

Demanding workforce,

Overseas cheap labour and cost of goods,

Low population count

All adds up.

 

I recently handed over to administrators a manufacturing and retailing business, that, prior to the World entering this country, did very very well, it was at one stage listed on the ASX, and netted 18% returns to shareholders up until the late 70's.

In 201x, it had increasing capital funding needs, was experiencing reduced market share, it turned over approx 100 mill pa, but ran at a combined three year loss of 17 mill.

Management needed a further 14 million, we owed the banks 25 mill, could not borrow anymore, and were in "bad bank" status with banks, ie we were in trouble.

Into aadministration, staff were all paid out, creditors are still fighting, banks sold off property, still owe 7 mill, but am able to service that.

 

No subsidy in this perticular industry from government. Had to run alone.

Never again, in this country would I make investment in any manufacturing.

Hindsight is a wonderfull thing, but once the milk is spilt, it's spilt.