By on January 11, 2010

Lost in the outback?

Despite his genial, affable manner, Alan Mulally is a businessman and, by all accounts, a businessman not to be crossed with. One story goes, when he first started with Ford, he let them know, in the clearest possible terms, “Everybody says you can’t make money off small cars,” he said. “Well, you’d better damn well figure out how to make money, because that’s where the world is going.” Long protected from the brutal rationalisation of the global market, Australia might be about to get a taste of the man’s darker side as he attempts to drag Ford’s Australian ops into the 21st Century.

The Australian
reports that the future of Ford’s Melbourne factory in Australia is undecided. The Ford Falcon’s current model will finish in five years’ time and there’s no cash on the horizon for retooling (unsurprisingly, considering its weak sales start). “We’re looking at a variety of things at the moment. What we build in Australia will evolve over the next 18 months to two years.” said Ford Australia Chief Executive, Marin Burela.

Alan “I’m Steve Jobs, mark 2.0” Mulally still hasn’t passed judgement on whether Ford will continue manufacture in the Land Down Under. The only thing he has confirmed was that developing a new Falcon, just for the Australian market, was no longer an option. “People who make one vehicle for one country — a different vehicle — those days are gone because you can’t compete with the global companies,” Mr Mulally said. “Around the world now, the things that are driving every purchase decision are quality, fuel efficiency, safety, smart design and the best value.” Seems like Mr Mulally is taking this “One Ford” policy very seriously.

There were plans to build the next Focus in Australia to replace the Falcon, but those plans have since been scrapped and Alan Mulally said there was no chance that decision would be reversed. Could there be a more sure sign that Ford do not wish to continue manufacture in Australia? Still, Mr Mulally didn’t want to alienate the Australian market so he trotted out the usual management speak in a situation like this, “Australia is a very important market for us and we’ve worked hard to be competitive,” he said. “No matter what, we’re going to serve the Australian market.” Which is great, but doesn’t help clarify the future of the Melbourne plant. In defence of Mr Mulally, Ford Australia built 55,000 cars last year, which is a small amount. Couple that with the fact that the United States and Australia have a free trade agreement between them, then suddenly, it’s easy to see where Alan Mulally is coming from.

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51 Comments on “Going Global, Ford Faces Uncertainty Down Under...”

  • avatar
    Paul Niedermeyer

    I pointed out the likely/inevitable death of Ford’s and GM’s Australian ops two years ago here:
    The high Australian dollar only makes this more inevitable. Falcon lovers, get your hankies out!

  • avatar

    Last of the V8 Interceptors! Somebody had to say it…

  • avatar

    • 0 avatar

      If the V8, RWD Falcon with the ‘should be in the Mustang NOW’ Control Blade IRS goes away…then there really is no reason to look at Ford when thinking about a car.
      But I remember when Saint Al brought a Falcon over for himself…and said something to the effect of “this is nicer than my Lexus’.
      And there still is the persistent rumor that Lincoln will finally get something worth buying in the near future.  It is rumored to have Falcon underpinnings…and our 5.0 V8

    • 0 avatar

      Ah, I get it. You hate Ford until they make something that’s V8 and RWD. You said replying to the 2011 Focus article that the only cars worth considering from any brand were V8 RWD; also, saying the Cruze is better than the new Focus when we know nothing about both marks you out as a GM fanboy…at last your motivations become clear…doesn’t make you any less annoying though.

  • avatar

    Is the Melbourne plant unionized?   That is key….

  • avatar

    How to solve Ford’s Australian delimma:
    1. Slap a “Falcon” badge on the back of a 2010 Ford Taurus SHO
    2. Export to Australia.
    Problem solved.
    THese people buy up Chicken Tonight and Kylie Minogue records, so Ford should be just fine.

  • avatar

    Ford will cede all of their large car share to Holden and alienate a huge portion of their fanbase Down Under.

    It’s also an immense waste of engineering talent.  Ford Australia (and Australians in general) really know how to make an exceptional RWD car at blue-collar price.  It’s stunning that Ford wouldn’t recognize that the same way GM has (and rightly so) and use it to their advantage globally instead of just closing up shop and becoming just another importer.

    The Taurus is a woefully bad car for that market, as Ford found out the very hard way once before.  There’s nothing about the new one that would make this time any different.

    • 0 avatar

      The reason why the Taurus flopped in Australia back in 96 was mainly because it competed internally with the Falcon and Fairmont (a Falcon variant), which could be had loaded for the price of a base Taurus. Throw the Taurus’ ovid styling into the mix, and the Falcon won the battle without breaking a sweat.
      Now, the Taurus is much better looking and won’t have the Falcon stepping on its toes, so I don’t think it will have too much to worry about.

    • 0 avatar

      Ford will cede all of their large car share to Holden and alienate a huge portion of their fanbase Down Under.
      Considering how Toyota and Hyundai are gaining traction selling front-drivers, I don’t think this is the case.  Ford and GM in Australia have spent far too long looking at what each other are doing and far too little time stopping their competition from eating their lunch.
      The derailment of GM’s exported Zetas has hurt Holden badly.  They barely make enough cars for sale in Australia to remain relevant as-is, and a large part of the current Commodore’s justification was that the costs could be spun off to GMNA—which didn’t happen.  Ford can’t afford to play GM’s Fantasy Platform Amortization game as part of some grand scheme to either titillate enthusiasts or perform some kind of corporate self-gratification.

    • 0 avatar

      The Caprice program will go along way to remedy their US export plans.  Holden will also likely supply more cars under Chevrolet and Buick in the US in the future.  Chevrolet is a vastly stronger brand than Pontiac ever was, it’s a shame GM bamboozled Holden so good on the GTO/G8 programs.

       Holden also has a very healthy export business under GM in other parts of the globe as well, their operation is nowhere near the level of danger as Ford Australia’s and GM is integrating Holden to be a vital part of their global product like Opel and Daewoo, their existence is safe.  I really feel for the Aussies that work for Ford today, they are getting completely hosed and for no good reason.  The talent there could be put to much better use.

      On the other hand, this is great news for Holden.  The RWD car market is not disappearing down there, it’s still one of the top types of vehicles Australians drive.  When Ford loyalists lose their choice they will not be buying Taurus’ and cheering about it.  They will go straight to Holden or German brands that give them the dynamics and performance they want. 

      The Taurus is not at the level of quality or dynamics the current Falcon is.  Or the level that Aussies are used to and expect from a Ford car.  Which is why they really don’t have any US-sourced Ford products there to begin with.

      The Taurus is going to need a styling makeover, a serious diet, and a completely new interior to have a snowball’s chance. 

    • 0 avatar

      TriShield, what we’ve heard around Detroit is two things regarding the Caprice program – one, it’s a police only product, and two, it’s may end up built in Canada on the same line as the 2009 Camaro. The later is not 100% certain, but the RWD replacements for the Cadillac DTS (and will merge with the STS) will be built in Oshawa, Ontario, so the capability is there, and not a lot of municipalities want to buy a car not built in North America.

  • avatar

    Focus FWD, C-seg, seems hardly a decent replacement for a RWD, D-seg, vehicle … unless there is a sea-change going on in Australia too, and the move is, as in the US, over and down (from truck to car, and one segment down), Ford would just be handing that volume over to Holden …

    The Aussies just love their RWD V8 cars … Now, that said, Ford is preparing a police-spec version of the D3, and, it might be reasonable to assume that if this meets with success with the boys in blue, perhaps it might be exportable down-under …  If the D3-Interceptor flops, then it will be necessary to reconsider an update to the Panther, perhaps in LWB and SWB variants …

  • avatar
    John Horner

    It makes no sense to engineer and build cars dedicated to the Australia market. 55k units per year is not enough to be cost effective. If Ford’s Australian engineering team is filled with top notch talent then they should be helping build Ford’s global products and not be focusing their talents on the minuscule opportunities afforded by the Australian domestic market.

  • avatar

    For what it’s worth, I can confirm that Australian Ford engineers are furiously working on some sort of project with Ford North America engineers. So, whatever plans Mr. Mulally is referring to are already in action.

  • avatar

    Not a bad lookin’ car – it’s like an Infinity G37 mated with a Aston Martin.

  • avatar

    If the V8, RWD Falcon with the ’should be in the Mustang NOW’ Control Blade IRS goes away…then there really is no reason to look at Ford when thinking about a car.
    Ford did make a world-class rear-drive car about a decade ago: the Lincoln LS.  The problem was that you cannot make a rear-drive car that meets customer requirements for space and reliability without charging more than the market will bear (which was whyDEW98s were sold as a Lincoln, a Jag, and a premium Ford).
    Enthusiasts have real problems understanding that all this stuff costs money.  BMW et al can get away with it because of the badge tax, but the cost and packaging advantages of front-drive are undeniable and unavoidable.  As soon as gearheads get over this, the better.
    Ford is not alone in this, and there’s no need to single them out: no one has been able to make commodity rear-wheel drive work without giving up something (price, margin, suspension sophistication, etc).   GM has two niche failures and one niche remains-to-be-seen.  Hyundai, Nissan and Toyota charge a premium.  Honda doesn’t even try.  Chrysler’s come the closest, and only because they used heavily amortized components and got a lot of mileage out of the styling.

    • 0 avatar

      The Lincoln LS was a seriously flawed car, there was nothing world-class about it.  It was a shameful BMW wanna-be right down to the me-too styling up front.   It did not have the engineering, quality or performance of any premium German car you could buy at the time.  But it certainly had the price tag.  And it certainly had Lincoln reliability (which is to say, none). I know, I test drove a couple and ended up with a BMW instead. 

      Lincoln is a perenial loser brand, it’s not even real luxury anymore, it’s third tier if anything.  Hyundai offers a more luxurious and better engineered car in the Genesis than Ford has offered as a Lincoln in the last two decades.  That’s Ford’s problem, not enthusiasts or customers. 

      People certainly want RWD cars, it’s not their fault Ford has consistently failed to deliver a good one.  GM has delivered a few, the former and current CTS and the G8 which illicited a strong response (and sold strongly) until it’s demise.  Chrysler also fields a huge number of LX RWD cars each year, even though it’s old now and in dire need of freshening.  The market for RWD (especially at lower prices) is seriously underestimated here, as Chrysler proved with their LX gamble. 

      When Ford creates a proper RWD Lincoln with a real Lincoln name (like Continental) and real Lincoln style (like the early 1960s Continental) and actual quality trim and modern comfort and dynamics then maybe they will sell a few.

      If Ford was smart they’d find a home for the luxury trim of the Falcon at Lincoln with a grille change.  Or simply make a proper Lincoln out of it’s guts like GM did the Camaro.

    • 0 avatar

      Most RWD fans can be put into three groups.
      1. the enthusiasts – people who know what rear wheel drive is and how it can affect the dynamics of the vehicle. The majority of these still get their asses handed to them by 16 year old girls in MINIs on any twisty road. A small minority of these have skill and appreciation for high amounts of horsepower, and understand the difference between under and oversteer AND how to control it. They make the conscious decision to buy a  vehicle that allows them to enjoy this skill.
      2. status seekers – buy a premium brand auto that just happens to have RWD. They don’t know or care what the difference is.
      3. dinosaurs – anything that they made 30 years ago is better than today’s product, therefore they buy the most obsolete rustic vehicle that they can find.
      The rest – the vast unwashed masses of vehicle buyers either don’t care about RWD or have figured out that FWD can fulfill their needs without the compromises in space and efficiency that comes with RWD.
      And yes, I know that your ’77 Impala got 40 mpg on the highway. As long as you did the calculating.

    • 0 avatar

      You forget
      4/ People who want to pull boats out of the river, tow a trailer full of rubbish to the dump, holiday with a caravan (camp trailer), tow a horse float. All of these activities are way more common in Australia than most parts of the world.

  • avatar
    Seth L

    So I’m running out of time to move to australia?
    I always thought they had great cars as a trade off for terrible food and indigenous animals that all wanted to eat your face.

  • avatar

    All I ever wanted was a good small car. A REALLY good small car, and I’m happy to have owned a few. So bring ’em on, Allen!

  • avatar

    terrible food and indigenous animals that all wanted to eat your face.

    My friends and I have a thoery that if you end up in an Australian ED  they have a giant chart and all they can ask you is “Point to what bit you!!”

  • avatar

    So, will Ford NA start thinking about engineering their Tauri and Fusions for both LHD and RHD like the Japanese and Europeans do?  Or will we Aussies have to look to the expensive German sources for medium and large cars? And why has no-one mentioned the Aussie Ford Territory? Did that disappear while I’ve been O.S?

  • avatar

    Globalization only leads to fewer choices.

    Brand loyalty is not meaningful in a world of “world cars”, because they are all the same.

    I’m keeping my Grand Marquis as long as I can – which will be a long time when you own a Panther platform.

  • avatar

    Ford Australia’s plans for the new Falcon/G6 et al are downsizing the engines to a 4 cylinder / 4 cylinder twin turbo / V6 combination. The 6 for low down torque. The Territory is still selling well, for the American imports, they had better improve their interior quality to take on Camry/Aurion. This is a link to a report about the car sales. Note that their is no model breakdown within the stats

  • avatar

    Cammy, you make it sound like Alan Mulally is the second coming of Darth Vader. He’s not. It is a business decision whether or not to allow Ford Australia to produce a car that Ford sells nowhere else in the world. It’s a nice sentiment that Ford needs to have a mid-size RWD sedan –unless not even the Aussies are buying it. You should be glad Ford committed more than a few million dollars to modernize the Aussie inline-6, also an engine that equips no other Ford product. To me that made no business sense and Ford Australia should have been required to modify the Falcon to accept the Duratec V6. Mazda makes the engine in Japan just in case the Aussies didn’t want to import them from Ohio.
    If Ford needs to have a mid-size RWD sedan in production, then it needs to be a global product capable of filling niches in Australia, America and Europe. Budget 1.5 to 2 billion dollars to build a scalable, modular RWD chassis capable of straddling the C/D size ranges. As well as building the next Falcon it should form the basis of a reborn Lincoln Continental and Mark X coupe/convertible, offering enough economies of scale that its independent rear suspension can be used on the Mustang. Then Ford could also spin off a two-seat version of that Mustang and call it the Thunderbird. For Europe, since PAG is no longer part of the program they could conceivably use a high-end product above the Mondeo, call it the Scorpio.

  • avatar

    What Alan wants make perfect sense on a global level but it’s probably extremely probelmatic on a provincial level.
    I can say quite categorically that Ford will ceed ALL market share to Holden if they move to a localised FWD RHD Taurus variant.
    Fords are used as taxis, cop cars, tow vehicles… this will all be gone.

    On the same level without overseas exports Holden is also dead. Its just a matter of time.

    Holden needs to move these Commodores to US for cop cars. They need to move them to the middle east.

    Ford has no hope of doing this. Holden’s Commodore will also change to FWD in 10 yrs time? 5 yrs? Who knows – but it’s inevitable.

  • avatar

    ugh this makes me so sad. the G6E Turbo is literally the first car i would go out and buy if i won lotto, and how many other cars can you buy with world class inline 6 power besides BMW?
    i have to say, i just don’t see the Taurus replacing the Falcon. the Falcon is sized closer to the Fusion and the Mondeo isn’t much shorter, the current US Accord is larger. the Taurus is much larger and closer in size to the Holden Statesman/Caprice and people will just not want a car that large (the Statesman/Caprice twins only exist because of exports, they sell a couple hundred per month).
    personally i think that the next Mustang should be based on a new Falcon platform. the current inline 6 will (unfortunately) be replaced at some point by the Ford V6, and they are about to share the same Coyote V8 in several months. the next all new models of Mustang & Falcon are also due around the same time (2015). also, the Taurus isn’t going to be able to be turned into a ute either, so that’s another market Ford would be giving up in Australia.
    regarding manufacturing cars in Australia, 55000 cars is still a decent amount for one plant to make and i don’t see the government allowing Ford to easily shut up shop, leaving only Toyota and Holden building in Oz. there would be so many jobs lost at parts supply companies etc, not just those directly employed by ford

  • avatar

    The most significant statement by Mulally regarding the Falcon was overlooked in the Australian article
    “You can imagine another new platform, just like the Falcon, that’s going to be rear-wheel drive for Mustang, so you can imagine driving the ONE Ford we’re going to have every one of those, and so there’s no reason why we can’t have it in Australia,”
    He said another option could be that Ford Australia would help develop the new rear-wheel drive platform for Mustang, which could form the base of a new Falcon.

  • avatar

    Wow, ignorance is the order of today when discussing Australia.
    1. We sent you a good car (the Holden Commodore) and you stuffed it up !! You made it look ugly (as with the Monaro before it) and you failed to promote it and you introduced it into a dead brand.
    2. I once went to a ford dealer with my parents to buy a falcon and we had a sit in a ford taurus first (a 94 model i think) we laughed about how bad it was and bought the falcon. There is no secret to why U.S car companies are on the ropes.
    3. We shouldn’t have our own car industry (yes, the market is too small) but U.S cars are not good enough, European cars are either too expensive or not suited to our conditions. Ford and GM get huge grants from our government so they stay.
    4. If U.S car companies want to survive they should build good products that require small changes to suit most markets (eg: Toyota, VW)
    5. Yes, we have Unions but they have never received the crazy benefits that U.S unions got. Our unions have a small sense of enlightened self-interest. Plus we have universal health care !
    6. By the way, we have excellent food here (fresh not fried) and we have much better coffee than the U.S.
    PS: we throw PRAWNS on the BBQ, NOT shrimps !

  • avatar

    There are enough worldwide variations of the V8 RWD platform for Ford to justify the expense a developing a new one. As mentioned, 55k vehicles while not a large output is a sufficient output to justify an assembly plant. Between all the worldwide applications a V8 RWD platform could be used for and the 55k production I think Ford will continue to build Australian V8 RWD cars. Although a RWD V8 platform isn’t global it is still volume wise a justifiable investment for Ford.

  • avatar

    The Australian Government also gives money to Toyota. And they also used to give money to Mitsubishi but that wasn’t enough.

    They too dissolved local production just like Nissan before them. There’s gonna come a time where govt. money is just not enough and we’re talking in the $15o mil. range here… not the billions the US gets.
    I personally think both Ford and Holden are safe. For the next 5-10yrs at least. However past then… it’s inevitable.

    This is another scare rumour based on the words of one man… who really doesn’t know what’s happening in the next 6 months… 18 months… etc.

    We are dissecting his words to a degree that is probably corrupting his intent… if there ever was such an intent in the first place.

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