By on August 22, 2013

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At a dealer event in Sydney, Australia, Ford CEO Alan Mulally defended the company’s decision to close its Broadmeadows and Geelong assembly plants in this country, saying it was Ford’s only option if they wanted to remain in the Australian market, what Mulally called the most competitive in the world. The Ford executive also explained that the automaker is taking three years to manage to shutdown in order have an orderly transition and to treat “stakeholders” equitably.

“Of course, it is a serious consideration where we decide to make things, but the world is becoming more and more integrated and you have to be competitive. “You have to be competitive or you don’t get a chance to stay in business and serve the customer. We’re doing the right thing by the consumer in the longer term.”

Mulally said that the decision to close the plants had nothing to do with the quality of Ford’s Australian built cars including the big rear wheel drive Falcon.

Mulally told dealers,

“I loved the Falcon the first time I was in it. But (the large car) market is really, really small. The customers have moved on to smaller, more efficient vehicles, and this is exactly what we are going to provide.”

Asked why Ford didn’t close the plants immediately, Mulally said,

“We really want to have an orderly transition, out of respect for all the stakeholders. That’s why we are refreshing the Falcon, because there are a lot of people that love the Falcon. And we will refresh the Territory, too. Absolutely we are doing the right thing for all the stakeholders involved, including employees, the supply base, the industry, we’re doing absolutely the right thing.”

Mulally also said that there was nothing the Australian national government, which has provided incentives to Ford in the past, could have done, that the only way Ford could remain competitive in that market was to import cars there, like every other automaker doing business down under. Ford is planning on building 15-20 new plants in Asia to supply Australia and other markets in the region.

“We have worked very hard to make a viable business here. We have had a tremendous public/private partnership and we are just not competitive making vehicles here in Australia. So we are doing the right thing. Any company needs to be making a reasonable return so they can continue to invest in new products. You know, this is the most open market in the world, the most competitive market in the world. There are more brands here than anywhere else in the world. There are more marques than in the rest of the world. This is a really competitive market and if you are going to get a chance to participate here, you have to be really competitive.”

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147 Comments on “Mulally On Closing Australian Ford Plants: “Doing The Right Thing”...”


  • avatar
    morbo

    My Aussie built Mitsubishi Diamante was rock solid. Shame for the people that work there though.

    With Mitsu and Ford plants closed, what’s left in the Outback? GM and Toyota?

    • 0 avatar

      Yep, GM and Toyota. Both say they’re staying, but both are hoping for some government “help” to keep things going.

    • 0 avatar

      When your companies are run by corporate scumbags – ESPECIALLY YOUNG ONES – who don’t believe in the product and are all driving German cars, things like this happen.

      If I WAS WORKING AT FORD, I’d be giving SRT a run for their money. The MKS would be a true competitor, as would the Taurus.

      The Fusion would have an optional Brembo Brake kit with the 3.5-L ecoboost and you could BET that every single product I was behind would make you want to have a Ford in the worst way.

      • 0 avatar
        RobertRyan

        @bigtrucksreview,
        Correcr , IF Ford had put the Falcon into the global supply line much earler it would as healthy as Toyota Australia. They never did and the results have been disasterous for Ford.
        The Falcon WAS no2 or 3 in the market when the Commodore was No1 for that 11yrs straight , not that long ago. Now both have been replaced by the Toyota Hilux and small Mazda’sand Corollas as No.1
        Ford Global products have sold woefully in Australia. As Mullally rightly said “Australia is the most competitive market in the world”, Ford’s Global Products are going to have /an are having a tough time in Australia.
        Before all the TROLLS jump on my post PARROTING Mullaly’s words. It is a crying shame the Falcon was not exported.
        Ford as a Company is in freefall in Australia. People here have written it off. It does not matter WHAT products it come up with i.e.A Mustang (using a copy of the Falcons suspension)
        is not going to bring them up to what they were

        • 0 avatar
          Pch101

          Toyota receives subsidies to stay in Australia, as does Holden.

          If the Falcon had so much potential as a world car, then it would make more sense to build them in the US or Europe, and then export them to Australia. Either way, you lose.

          • 0 avatar
            RobertRyan

            Logically that does not make sense as Ford’s Global Transit has been built in the UK and Turkey (Turkey from now on)and the Transit connect has been imported from Turkey. The Sprinter is built in Germany and imported rather than the building it in the US. There would be other examples as regards OEM’s

          • 0 avatar
            doctor olds

            @RRyan- Ford is a global company, operating in every region of the world. They know very well how to comply with any regulations anywhere. Assembling TransitConnect in Turkey means nothing other than that is the business choice Ford made.

            Likewise, GM sells more cars than any other maker outside of the closed Japanese market. Roughly 2 million more than Toyota, as a matter of fact.

            Your notions continue to imply a complete lack of understanding that these Global automakers know how to sell anywhere and everywhere.

        • 0 avatar
          raph

          Can you cite that about the S550 Mustang rear suspension.? I’ve heard it might ride on a variation of the control blade suspension but nothing definitive.

          Also, however superlative the Falcon might be Ford would have needed plenty of full-sized cars riding on that platform to make it work, especially if the variants were sourced form Australia due to the strength of the currency (as GM has painfully found out and is still subject to).

          As a Mustang fan to be frank, I’m glad its the other way around as the Camaro has proven a full sized platform just doesn’t scale all that well and the thought of a nearly two ton base V8 car is too heavy even for me (my 09 GT500 with SC gear big brakes, HD trans and HD engine weighs a decidedly un Mustang like 3900 pounds) Just so a Falcon based global rwd chassis can meet the sort of demand that would make it cost effective and viable.

          • 0 avatar
            RobertRyan

            @raph,
            If they had done some earler, then it would have created more of a Market. I know they sent some FPV cars to South Africa, testers were very impresesed bu the Australia dollar weighed against it.
            The Falcon should have been in the Ford Global chain well before this.

        • 0 avatar
          Robert Gordon

          “Before all the TROLLS jump on my post PARROTING Mullaly’s words. It is a crying shame the Falcon was not exported.”

          Falcon was never package protected for Left-Hand Drive. A lot of the structure involved, particularly the bulkhead assembly is carry over 98DA (ie AU Falcon) – it is completely incompatible with LHD. Designing new parts is certainly possible but takes money and greatly adds to line complexity.

          We certainly did a study of the ramification of adding LHD to the mix, at about the same time we were studying Ford Focus production. An example of the task at hand was the headlamps. Adding LHD would mean a complexity of about 30 different headlamps – not including Territory which are put on at the same location.

          The first problem you run into is line space. Headlamps are bulky items and are stored lineside. The arrangement has them stored in parallel and is up to the operator to pick the correct one according to the build sheet and this is checked at the end of that particular line. Now the FG headlamp has quite a complex locking bracket arrangement. This together with wiring loom access (the intercooler pipes on turbo variants obstruct access) means that the headlamp is sequence-locked, that is to say the headlamps must be put in at the station they are, unless of course you radically alter the design. So the problem is having to feed 30 different headlamp types to a already cramped area at the end of trim line 2. This cannot be done later because at the start of trim 3 the car turns sideways and is unsuitably orientated and the floor height is too high ergonomically. A way around this would be to line sequence the headlamps. This has been considered (the Falcon IRS is line sequenced for instance) but is basically impractical since it would require a marketplace area at BM to prepare the sequence. There is basically no space for this. The other option would be to do it at the supplier. However unlike the supplier of the IRS, Dana which is next door to Ford, the supplier of the headlamps Hella is at the other side of Melbourne in Mordialloc – an hour’s trip if you’re lucky. This makes sequencing a huge challenge – practically impossible. Plus sequencing takes a lot of equipment which all requires capital expenditure.

          Multiply this story by many other market specific components and you begin to understand the monumental undertaking.

          It is not impossible, many other manufacturers do it for example Holden, but Ford Australia is a pretty bare-boned outfit and it would require mega investment to do be able to cope with this sort of thing.

          • 0 avatar
            doctor olds

            #Robert Gordon- Thanks for the glimpse into some of the complex aspects of the auto business!

          • 0 avatar
            RobertRyan

            Well what do you know a Troll has turned up. Welcome Robert Gordon(Menzies) and a troll thanking itself.

          • 0 avatar
            Robert Gordon

            “Well what do you know a Troll has turned up. Welcome Robert Gordon(Menzies) and a troll thanking itself.”

            With a constructive remark like that, a casual observer might be left wondering who’s the troll?

          • 0 avatar
            Robert Gordon

            Just for the sake of clarity, line sequencing is a mechanism of presenting the operator with the correct component variant for the car being built. It removes the element of choice from the operator and therefore the danger of fitting the wrong part to the wrong car. It also enables considerable space saving at the point of assembly, cycle time reduction and ergonomic improvement. However implementing a process that reliably gives the operator the right part is a very complex undertaking and is not very tolerant of faults eg broken parts.

          • 0 avatar
            wumpus

            Interesting concept, and no doubt true for the focus, but are you seriously suggesting that there are 30 separate markets that will buy a Ford Falcon? If you need 1 for Australia and 1 for the US and 28 to pepper the Gulf with each principality having its own choice of liveried headlights, I suppose that is a decision that needs to be made as to how high a price the Gulf states will pay for a big RWD V8.

            I think there is a bid difference between making a Ford Focus a model for the entire world and exporting a Ford Falcon.

          • 0 avatar
            Athos Nobile

            @RobertRyan

            Since when using an alias/nickname is a sign of a troll?

            Robert Gordon provided a detailed view on the challenges faced by the people up there in BM. And that’s just in one area of their trim shop. He must have stories like that everywhere.

            They have to fit the headlamps in line because unlike Holden they still have the crash bar integrated into the body structure. And bloody intricate it is.

          • 0 avatar
            billfrombuckhead

            Maybe Ford of Oz could have helped the sorry “Lincoln Motorcar Company”

          • 0 avatar
            mikey

            # 1… Oh yes…Once again we have input from a guy like Robert Gordon. he is not a wannabe,and really does have hands on experience.

            #2….Or he is one heck of an accomplished B.S artist?

            I’m going with # 1.

            Were staring to attract more,and more of these guys,with lots of insider info here at TTAC. Lets welcome them, and try, and keep them on the B&B.

          • 0 avatar
            Athos Nobile

            @wumpus

            “but are you seriously suggesting that there are 30 separate markets that will buy a Ford Falcon?”

            He was talking about is about having 30 different types of headlamps assemblies in the line.

            Just so just have an idea, just by watching the cars on the street I counted 5 different headlamp variants on FG Falcon. That times 2 is 10 different parts. Add to that Territory and the count goes to 12.

            Since a LHD vehicle needs different headlamp optics, you would be looking at double of what is above, i.e. 24. And that is assuming the supposed LHD markets use the same RHD look (same variants as the locally sold car). Otherwise the number increases.

            As Robert Gordon said, headlamps are big and bulky. A big crate may have 30 of them and take a lot of real estate.

          • 0 avatar
            RobertRyan

            @Athos Nobile,
            Also known as Denvermike and quite a few other Alias’s on on TTAC and PUTC. I think Lou from BC could rattle them off.
            Expert on the Ford Falcon and Australian car culture, but does not come from Australia.. Which he admitted himself. Parrots exactly what Alan Mullaly said in his speech.
            He like his alias’s believe the F150 should be exported worldwide and the “:chicken tax” is harmless.

          • 0 avatar
            RobertRyan

            @Billfrombuckhead
            “Maybe Ford of Oz could have helped the sorry “Lincoln Motorcar Company””
            Ford Australia had the Australian equivalent of the Falcon that could have helped Lincoln, but Ford US managment knew better.

          • 0 avatar
            danio3834

            It would certainly seem that starting from the ground up as a global product intended for LHD and RHD would be the most effective method.

            That being said, I don’t think we’ve seen the end of RWD performance sedans from Ford. Since the S550 Mustang will be built in both LHD and RHD, building a sedan that is both should be much more cost effective this time around.

          • 0 avatar
            doctor olds

            @Athos Nobile- I can vouch for you, and also for Gordon exhibiting understanding of issues around car production. Barely organized chaos, it sometimes seems.

            I virtually grew up in the biggest car assembly plant in North America almost every one of my first thirty or so years.

            From people manhandling bodies dropped through a hole in the second floor unto a moving chassis, to todays AGVs and automated chassis-body marriage, “what a long strange trip its been.”

          • 0 avatar
            Pig_Iron

            OK Gordon, I spent 20 years in auto design and manufacturing. What you say is true for an existing program, but needn’t apply to a new one. Excuses get in the way in of moving forward.

            In any case, I feel for the employees at Ford and the supply chain who will be scattered to the winds. The auto industry is not low tech, and it hasn’t had giant smoke stacks for a long time.

            I think this will hurt Australia in the end. When a manufacturer turns it’s back on country, there is no excuse to be loyal to it.

          • 0 avatar
            Big Al from Oz

            @Robert Gordon
            The change and redesign on a rear drive isn’t as complex and issue as you are making out.

            The biggest hurdle would be to make the vehicle compliant to US design regs. I think you are eating to much sugar.

            The US would be the biggest market for this vehicle if Ford could have produced them competitively.

            There is plenty of scope due to the size of the vehicle to overcome simple engineering problems.

            Wiring harnesses? Wow, you Ford engineers aren’t up to the task.

            I’ve been biting my tongue, but are you really from Australia?? Somehow I don’t think so.

          • 0 avatar
            doctor olds

            @BAFO- Gordon actually exhibits good knowledge of auto manufacturing in his writing. You can learn from someone like that.

            I am curious, since you fancy yourself to be so knowledgeable, why do you think it is that don’t you have a high paying job in the car business?

          • 0 avatar
            Big Al from Oz

            @DocOlds
            Because I have a high paying job in aviation.

          • 0 avatar
            doctor olds

            @BAFO- That explains why you don’t understand the car business.

            What kind of aviation industry exists in Australia? Do you have any manufacturing in this sector?

  • avatar

    It may be the right thing for Ford’s bottom line, but what of the workers? For morbo, you would be better off with a Toyota product than a GM, good luck to you and all others “down under”.

    • 0 avatar
      morbo

      uhhh, I’m actually in DC. My Diamante lived it’s life under the harsh Jersey Shore sun before transitioning to the harsh DC climate; our air is heavily polluted from Capitol Hill hot air and K Street BullShtuff.

      But regardless of where anyone’s from, you’re statement about being better off with Toyota product versus GM is true.

    • 0 avatar
      RobertRyan

      Big Issue here for the workers in Geelong and the City Administration , not happy at all.

  • avatar
    28-Cars-Later

    “like every other automaker doing business down under.”

    Except GM/Holden.

    • 0 avatar
      Pch101

      Most of GM’s Australian lineup is imported.

    • 0 avatar

      GM imports cars to Australia. It would be interesting to see what percentage of GM cars sold in Australia are locally made and what percentage are imported.

      • 0 avatar
        28-Cars-Later

        Agreed.

      • 0 avatar
        doctor olds

        Numbers for 2012: Holden sold 30,532 Commodores and 29,161 Cruzes. I know these cars are assembled there. Commodore is primarily sourced in Australia, and Cruze likely has higher imported content, though I have no detailed knowledge.

        Commodore and Cruze accounted for 59,693 or 52% of Holden’s 114,665 sales total in 2012. Reportedly, Colorado sales were hit hard by a 6 month lack of availability. That suggests imports would typically account for at least 50% of Holden sales.

        Maybe an Aussie can let us know if any other Holden product is assembled in country?

      • 0 avatar
        RobertRyan

        @Ronnie Schreiber.
        A Lot of GM’s Australias product is imported from elsewhere, but it does not compete well with Toyota, Mazda and Nissan.
        The Current Commodore is selling well and the HSV cvwrsions is in extreme demand.

        • 0 avatar
          doctor olds

          For the last full year, 2012:
          GM Holden was the second largest seller in Australia, after Toyota.

          Holden Commodore and Cruze were the third and fourth best selling cars.

          Holden Captiva was the best selling SUV.

          Holden Colorado was the fifth best selling Ute, reportedly despite being in short supply for half the year.

          • 0 avatar
            RobertRyan

            @Holden Colorado is roughly below the Ford Ranger, which is 8th or 10th in OVERALL VEHICLE sales.
            Pecking order is the
            Hilux(Best selling overall vehicle, not just Pickup, for several months last year and this )
            Nissan Navara
            Mitsubishi Triton
            Then the RANGER.
            Mazda’s BT50 has been held back by supply issues not deman related.
            The Chinese GREAT WALL is going backwards rapidly and may exit the market.

          • 0 avatar
            Big Al from Oz

            @DocOlds
            Ford Australia and General Motors Holden are losing business as a percentage of market share.

            The only Big 3 company increasing is Fiat/Chrysler. They are competing mainly with the cheaper Korean imports in price and levels of bling.

            Fiat/Chrysler has a little way to go before it will be in the same league as Japanese and European vehicles. Even the Koreans still have the US vehicles on quality. But I think in less than a decade the US will be up there in overall vehicle quality, but so will price then.

    • 0 avatar
      Pch101

      The Commodore/Caprice/Ute and Cruze are built locally. Everything else is imported, mostly from Korea.

      Most of the nameplates, and about half of the vehicles delivered, are imported.

      • 0 avatar
        Monty

        This just made my day – a comment from Pch101. Now all I need to see is a comment from Psarjinian to complete me.

      • 0 avatar
        RobertRyan

        “find it amusing that I know more about Australia than some of Oi! Oi! Aussies who post here.
        The Australian tariff is double the US tariff. That’s not an opinion, that’s a fact.
        Australia has a luxury car tax, the US does not. That’s not an opinion, that’s a fact.
        Australia props up its auto industry with subsidies. That’s not an opinion, that’s a fact.”

        I find it interesting that someone and others here who have extremely intimate
        Knowledge of the Construction of a Vehicle in the US does not know that extreme critic of trade restrictions of Alan Mullaly said of Australia.

        “You know, this is the most open market in the world, the most competitive market in the world. There are more brands here than anywhere else in the world. There are more marques than in the rest of the world. This is a really competitive market and if you are going to get a chance to participate here, you have to be really competitive.””

        So why is the US market not so competitive? Trade restrictions/Unions?

  • avatar
    -Nate

    Bummer ; this .

    -Nate

  • avatar
    doctor olds

    Mullally- “You know, this is the most open market in the world,…”

    That was confirmed by observation of vehicles on the roads, at least in NSW and Victoria!

    Aussies are lucky to have choices not constrained by government intrusion.
    They are not blessed with good pricing!

  • avatar
    Sob93

    Cheap Asian labor Cheap Asian labor Cheap Asian labor

  • avatar
    Z71_Silvy

    Big Al: Still spewing crap after all these years.

    He needs to leave the auto industry before he ruins it even more and go back to screwing up airplanes.

    • 0 avatar
      Scoutdude

      I’m not sure how you consider this ruining the auto industry by closing plants that aren’t profitable. They are not exiting the AU market they will just import cars from plants that can make a profit.

      • 0 avatar
        doctor olds

        Maybe he defines auto industry more broadly than the dealer body.

        • 0 avatar
          Scoutdude

          ????

          • 0 avatar
            doctor olds

            To me, the term “auto industry” means the product development and manufacturing capability, as well as the sales function.

            Ford is discontinuing the first two components and as such, deteriorates Australia’s auto industry, imho.

          • 0 avatar
            Scoutdude

            But the Australian operations weren’t pulling their weight so it would have been better to keep them on as a drain on the company?

          • 0 avatar
            doctor olds

            @Scoutdude- I am not making that argument! I am just saying that the Australian Auto Industry is diminished by losing Ford’s non-sales functions. I am not criticizing Ford. It seems they made the right business decision, as your question alludes.

      • 0 avatar
        Big Al from Oz

        @Scoutdude
        Maybe we can have a 25% chicken tax and CAFE footprint regs on large sedans to protect our market. Maybe the US should adopt a similar idea to protect pickups, SUVs, etc:) Then Falcons and Commodores might become profitable.

        Then Chrysler 300s can sell for over $60 000 instead of 40 000 odd dollars.

        That’s fair stop US, UAW built vehicles.

    • 0 avatar
      RobertRyan

      @Z71-Silvy
      After screwing up his “pride and joy” The Dreamliner I think Boeing would be very very unhappy to see him anywhee near the place. It was started in 2003 and now still grounded in 2013 10yrs afer Free Pass to Airbus.

    • 0 avatar
      Silvy_nonsense

      Anyone who thinks Big Al is doing a bad job at Ford or did a bad job at Boeing has absolutely no grasp of the relevant facts and/or is a complete numb skull. Alan Mulally is a heck of a manufacturing executive. He did a great job at BCA and he’s doing another great job at Ford.

      • 0 avatar
        RobertRyan

        @Silvy-Nonsesnse
        I agree totally with @Z71-Silvy

        • 0 avatar
          Scoutdude

          Then you obviously aren’t paying attention. Alan was responsible for keeping Ford out of bankruptcy and got them to focus on profits not chasing sales numbers or unprofitable operations and markets.

          As far as the Dreamliner goes a lot of the problems are unrelated to Mullaly. The only thing you can blame on him is the unrealistic time line to get it in the air, considering it was an all new plane using mostly all new to the company materials and technology.

          • 0 avatar
            RobertRyan

            @Scoutdude,
            He was the “genius” who signed off on alterations he wanted made with the plane.So he has a lot of responsibility as far as what has happned to the plane.
            Getting Ford out of bankruptcy? he leveraged the company highly to help make the changes that were needed . It still carries a lot of debt.

          • 0 avatar
            mkirk

            Ford does carry more debt than the other domestic carmakers, but then again they didn’t have the Government waive a magic wand and wipe it all away.

  • avatar
    gessvt

    “We’re doing the right thing by the consumer in the longer term.”

    “Absolutely we are doing the right thing for all the stakeholders involved, including employees, the supply base, the industry, we’re doing absolutely the right thing.”

    “So we are doing the right thing.”

    “It’s not a lie if you believe it.” – G. Costanza

    • 0 avatar
      highdesertcat

      I don’t think it is a lie. And I do believe, given the choices, Ford made the right decision for their share holders.

      And, ultimately, Ford is only responsible to its share holders and owners.

      I believe that the share holders also view this as a good thing. They are in it to make money.

      • 0 avatar
        SoCalMikester

        ford is responsible to their customers, firstly.
        no customers, no business

        their employees secondly, because they MAKE the product. well engineered and assembled product makes happy customers

        suppliers thirdly, because without them supplying quality parts at a fair price, at the right time it cant happen

        shareholders, rightly should come last. if the first 3 aspects are working, shareholders WILL be rewarded.

        just my rational opinion

        • 0 avatar
          highdesertcat

          That’s certainly one way to look at it but if the shareholders had not put up the money and took the chance, there would be no need for customers because there would not be a product.

          Entrepreneurs do not open businesses for anyone’s benefit but their own.

  • avatar
    billfrombuckhead

    At this point, Australia is nothing more than a raw material colony for China. The Aussies need to kick JapanInc to the curb to smooze their Chinese most favored customers. Besides today’s GM is building better stuff than TRDyota anyhow. The new Cadillacs, Impala, Cruze and GM trucks are certainly compelling.

    According to Allpar, Jeep Grand Cherokee was best selling large SUV in Australia last month.
    I’m sure Aussie born Jeep CEO Manley will soon have American, Italian and Chinese Jeeps arriving at the ports.

    • 0 avatar
      RobertRyan

      @Billfrombuckhead,
      As I said in my last reply to you on exasctly the same post. No the Jeep Grand Cherokee was NOT the best selling Large SUV in Australia, ALL PAR got that wrong.
      No Australia is MUCH More than a raw material colony for China the same as the US is much more than the largest DEBTOR to the Chinese Government.
      “GM Is building better stuff TRDoyota” No it is not. it wish it was . Toyota by far is the biggest Automotive sector holder in Australia.

      • 0 avatar
        Hummer

        Grand Cherokee is a midsizer

      • 0 avatar
        billfrombuckhead

        ACCORDING TO THE AUSTRALIAN AUTOMOTIVE WEBSITE CARADVICE GRAND CHEROKEE WAS NUMBER ONE LAST MONTH IN LARGE SUV SEGMENT!

        “The Jeep Grand Cherokee (1196) won a tight tussle with the Toyota Prado (1059) and Holden Captiva 7 (1016) in the large SUV segment, as the Ford Territory was bumped to fourth (966).”

        http://www.caradvice.com.au/244916/car-sales-july-2013-winners-and-losers/

        If you don’t even know your own country, you ought quit lecturing Americans!

        You’ll win a grudging respect for Allpar, it’s a hell of a site.

        • 0 avatar
          RobertRyan

          @billfrombuckhead
          I have to disagree with Caradvice, The Grand Cherokee, Toyota Prado, Captiva are midsizers. I agree with Hummer they made a mistake with the category.
          The Land Cruiser and Nissan Patrol are large SUV’s

        • 0 avatar
          Big Al from Oz

          @Billfrombuckhead
          The vehicles that you mentioned are midsize SUVs here in Australia.

          The Patrol, Landcruiser, Discovery, Rangie are large SUVs.

          The Grand Cherokee is doing quite well here. It is price competively, which is great. It is also quite an acceptable 4×4 wagon, it has to be it’s based on a Merc.

          The biggest downfall is the Pentastar, that’s why the VM diesel is such a big seller.

  • avatar
    Big Al from Oz

    It is very sad to see Ford leave Australia, but they can’t compete.

    I don’t think the government should support them either. Again supporting unprofitable business through handouts and subsidisation and tariffs will only send a country broke, ie, US, EU, Japan, etc.

    We have the most open and free market in the world and if you can not compete then someone else will fill your shoes.

    Even GM Holden will go soon. It cost’s twice as much to knock a Cruze up in Australia as Korea. So why should the customer pay extra for that vehicle.

    Billfrombuckhead again shows his ignorance of economics. Australia is what is termed “Post Industrial”, our economy is 70% services, 9% manufacturing, believe it or not our agri-industry is as large as our mining sector.

    Why should Australians pay extra tax to keep Ford, GM and Toyota alive in this country? All that does is takes money out of your pocket. The money could be invested into better industries/infrastructure and projects.

    I don’t think we should reduce our living standards to achieve this.

    It is sad.

    As Ford, GMH and Toyota leave this country we have a company working with Audi developing composite car parts and panels.

    Hopefully this will bear fruit. But Australia has managed to resolve these types of issues in the past.

    • 0 avatar
      ihatetrees

      @Big Al from Oz:
      >>We have the most open and free market in the world and if you can not compete then someone else will fill your shoes.<<

      I'd agree that Oz has an open and free market when it comes to import / export. The US could learn from Oz in that regard.

      On the other hand, Australian labor markets are tightly controlled and heavily unionized. And green policies have made electric generation insanely expensive for a country brimming with coal and natural gas.

      • 0 avatar
        highdesertcat

        We aren’t doing so well in the US of A these days. By comparison, Australia is doing better in more aspects that benefit more people.

        I won’t get into a political discussion here because that would be off the topic, but your comment…….

        “On the other hand, Australian labor markets are tightly controlled and heavily unionized. And green policies have made electric generation insanely expensive for a country brimming with coal and natural gas.”

        ………works a lot better for them than it does for us.

        Speaking only for myself here, me and mine are a lot worse off today than before Obama and his policies tore apart our happy way of life but that is probably because we don’t qualify to get “money for nuttin’, foodstamps and cellphones for free.”

        One other thing about Australian unions, they are cooperative, not destructive.

        American unions are adversarial and destructive.

        • 0 avatar
          sunridge place

          Classic HDC post…

          ‘I won’t get into a political discussion here because that would be off the topic’

          then

          ‘me and mine are a lot worse off today than before Obama and his policies tore apart our happy way of life but that is probably because we don’t qualify to get “money for nuttin’, foodstamps and cellphones for free’

          • 0 avatar
            highdesertcat

            If you are doing better, my hat’s off to you, chump.

          • 0 avatar
            sunridge place

            Easy there…I’m no chump. I just thought it was kind of funny.

            Sorry your ‘happy way of life has been torn apart’

            I’m not going political either…but I won’t contradict myself and then go political after saying I won’t.

          • 0 avatar
            highdesertcat

            That wasn’t being political, at least not from MY ‘Independent’ point of view.

            I loathe both political parties equally and have at one time been affiliated with both parties starting as a Democrat and morphing into a Republican when I started to pay all those taxes out of my sorry pay check in the military.

            So, here I am in 2008, having clawed my way up to respectability and decent income (on my own, I might add, without the help of the government as Obama is wont to say) and no sooner does the new administration come into office and my money shrivels up to nothing.

            You have to understand, I don’t qualify for all those freebies that so many non-working Americans enjoy. They say I have too much property and assets although my real income is below the poverty level. Yeah, go figure!

            Now in 2013 my money buys even less than it did last year but my expenses have gone up exponentially. This is not a happy situation that can be looked upon with self-satisfaction.

            My wife’s dad who used to pay our Group Health insurance through Blue Cross/Blue Shield through his business has finally agreed to drop it altogether and uses only his Civil Service FEHBP and Medicare, and the rest of us (all retired military) have reverted back to Medicare and TriCare/TriCare for Life, and VA, of course, for the service members.

            So he gives his daughters the money he saves not paying for the Group Health insurance.

            But the real shocker is to see how the lives of the retired have taken a dump while their property taxes have doubled.

            Obama’s policies may work for a lot of people, but not for me or people like me. It’s a good thing that all my kids are employed and making a decent living because in MY area a lot of “kids” are moving back in with their parents.

            How can this possibly be a good thing? It is a matter of politics. It’s how well you are doing under Obama.

            I was better off during Bush and Clinton. And so were many other Americans.

          • 0 avatar
            sunridge place

            Again…sorry your happy life has been torn apart by Obama. Also sorry that Obama doubled your property taxes.

            The fact that a 60+ year old man is crying that his father in law no longer pays his health insurance premiums and gives the money he saves to his daughter (perhaps your wife and sister-in-laws?) as you move to taxpayer subsidized options is priceless. The fact that you don’t even understand the irony is even funnier.

            Other people move on through life and achieve things without sitting around blaming other people

          • 0 avatar
            Lie2me

            I didn’t earn a nickel under Eisenhower or Kennedy…

          • 0 avatar
            IHateCars

            Lol….well said.
            Everytime time that HDC posts I get a mental picture of Grandpa Simpson yammering on.

          • 0 avatar
            highdesertcat

            I only speak for myself when I publish my concerns and I understand that there are folks who are better off under the current regime and economic policies. Good for them! That means that they’ll never know that there is better to be had.

            What concerns me is that without the Blue Cross/Blue Shield coverage we have to settle for second-rate medical care because in my area the best doctors do not accept Medicare or TriCare.

            When cancer comes knocking on your door, that’s when you find out how good your healthcare coverage is.

            We have already lost several doctors in the gas&sip where I live, among them an Internal Medicine doctor, a heart specialist, a Surgeon, a Gastrointestinal doctor and a Dermatologist.

            These people chose to leave the US for such exotic places like New Zealand to practice medicine there. One of them retired at age 55 and is sailing the Bahamas. Another has gone to work for the local VA Clinic.

            To some individuals, these are not serious issues because they don’t need medical care (yet). But for the Grandpa Simpsons of my age group yammering on, this is a huge issue, especially if they have to drive 432 miles roundtrip for a doctor’s appointment.

            Some of these old codgers are battling various cancers, or heart disease, or whatever afflicts old people. One consolation for us oldsters is that one day those young people who scoff at our concerns will face their own. Then they’ll be singing a different tune when they can hear death’s rattle at their front door.

            BTW, the free Obama phones are not a lie. In my area they’re signing people up inside malls and in front of grocery stores. Also at Wal-Mart and K-Mart. NM is the second poorest state after Mississippi. A lot of people cannot afford a land line. Maybe that’s why they’re pushing these free phones.

            The target audience appears to be young people since they cornered my 21-year old grand daughter. She just flashed her S4 at them and said she wasn’t interested.

            I don’t know who the contractor is in NM but I also saw them signing up people at the BX on the military base some time ago.

        • 0 avatar
          billfrombuckhead

          The “free Obamaphone” is a lie. It’s a mischaracterization of a program started by Ronald Reagan. If politics is going to be talked about, then at least tell the truth and quit the Faux News/Drudge propaganda. BTW, Obama hasn’t a damn thing to do with property taxes. I’ve heard Republicans blame Obama for their car tags prices going up. Next they’ll blame him for a rainy day! Here’s the truth about the “Obamaphone”.

          “Owing to the fact that people generally need phones to apply for jobs and enroll their children in school, and elderly citizens need to be able to call their families and emergency services, the government decided in the ’80s (under Ronald Reagan, no less) to institute the Lifeline Assistance program. In 1996, Bill Clinton signed the Telecommunications Act into law, which offered either cell phones or landline services to low-income Americans.

          Today, 38 states, one of which is Ohio, participate in the Lifeline program. If you live in one of those locales and your income is at or below 135 percent of the poverty line, or if you qualify for certain benefit programs like Medicaid and TANF, you can apply for a free cell phone that offers you 250 minutes of talk time per month. The people who are getting these phones aren’t getting iPhones or other smartphones; they’re often people in urban or rural areas who are being supplied with basic cell phones so they can call the hospital when they’re sick, or receive calls if there’s a problem with their child at school.

          If you’re upset that Obama is giving “freeloaders” gratis cell phones paid for with your tax money, don’t be. Firstly, Obama had nothing to do with the Lifeline program: the “Obama phone” narrative is a myth that both liberals and conservatives have fallen for since 2009. Secondly, Lifeline isn’t paid for with tax revenues. Rather, Lifeline is funded with a pool of money, called the Universal Service Fund, which is paid for with revenue donations from telecommunications providers. Some of those providers—like Verizon, for instance—pass off that cost to their customers with a Universal Service fee, but the government doesn’t mandate that the money come from citizens, meaning it’s technically not a tax.”
          http://gawker.com/5947133/the-obama-phone-program-has-nothing-to-do-with-obama

          • 0 avatar
            sunridge place

            Now now…don’t try and ruin HDC’s story. Facts don’t matter here.

            Everything was great for him until 2008. He achieved EVERYTHING without help from anyone. Then, Obama was elected and it all went downhill from there. Somehow, the President of the USA was able to double the propery taxes in his area and convince his father in law to stop paying his health care premiums.

            But, as he tells us over and over and over again, he cares not how much gas costs when discussing trucks etc. He brags over and over again about buying cars for himself, his wife and grandkids.

            He talks about how much money his father in law and wife have made in the real estate business–which gets plenty of tax breaks to keep it alive.

            Don’t ruin his story…its amusing to follow.

          • 0 avatar
            Kenmore

            Gakka? What Gakka know?
            Dey doannoa shi-

            Ah listens too Mi-CHELLE!

          • 0 avatar
            highdesertcat

            “Don’t ruin his story…its amusing to follow”

            I’m glad you like it.

          • 0 avatar
            Dr Lemming

            HDC: “But the real shocker is to see how the lives of the retired have taken a dump while their property taxes have doubled.”

            Property taxes are typically levied by local and state governments; the feds have nothing to do with them. Your property taxes can go up — sometimes substantially — without ANY rate increases if the value of your property escalates. I personally wouldn’t mind the value of my home doubling, particularly given the hit it took during the Great Recession.

            The state I live in has a number of programs that help low-income seniors stay in their homes by either exempting or deferring their property taxes. Have you checked to see what your state offers?

          • 0 avatar
            ExPatBrit

            There you go Mr Lemming with your “elitist” facts again.

            What about HDC’s gut feelings about this issue.

            Saw it at Wally World what more proof do you need?

      • 0 avatar
        Pch101

        “I’d agree that Oz has an open and free market when it comes to import / export. The US could learn from Oz in that regard.”

        The standard US tariff on vehicle imports is 2.5%.

        The standard Australian tariff on vehicle imports is 5%.

        Are you suggesting that the US double its import tariff?

        • 0 avatar
          ihatetrees

          My point: I agreed with Big Al that Australian is export/import friendly – probably more so than the US.

          I did not mean that Oz would trump the US in every instance. For those (like yourself?) who troll through the tariff codes of both nations, I concede that differences exist and the US is sometimes the better nation.

          • 0 avatar
            Pch101

            Australia has a higher import tariff.

            Australia has a 33% luxury tax that is set that so it targets cars that cost more than the Commodore.

            Australia has a long history of propping up its local auto industry. As we speak, Holden is fishing for more money, and Toyota has also stated that it will need subsidies if it is to stay.

            Australia exports between 70-140,000 cars per year. In 2011, it was 74,000 units, equal to about 0.1% of global car sales that year. Australia is a tiny producer of vehicles by world standards.

          • 0 avatar
            Big Al from Oz

            @Pch101Mike
            WTF?

            Another opinion, based on what?

            The Commodore isn’t targeted against BMW, Mercedes Benz, some Audi’s, Rolls Royce, Bentley.

            Commodores come in at just above $30 000, we under the $60 000 threshold.

            If you want to talk bull$hit and think you are knowledgeable, then you had better be correct when debating.

            Or you will prove yourself a goose.

          • 0 avatar
            Big Al from Oz

            @Pch101
            Another stretch of the truth in your luxury tax comment.

            I thought you were supposed to be a smart and intelligent debater?

            The luxury car tax doesn’t affect Commodores, maybe some HSVs/FPVs.

            Most Commodores sold come in at under $45 000 the luxury car tax comes in at $60 000.

            This tax affects BMWs, Mercedes, Rolls Royce etc. These vehicles don’t compete against Commodores/Falcons.

            So when delivery facts, don’t distort or cloud a debate, you will only look like a fool if you can’t provide current, valid, and credible information.

            Also, links to prove that the luxury car tax is a barrier against luxury marques to give GMH/Ford a boost would also assist your argument.

          • 0 avatar
            Big Al from Oz

            @Pch101
            The luxury car tax doesn’t impact luxury vehicle sales at all.

            Australia has the highest ownership rate of performance vehicles in the world per capita.

            The Luxury car tax comes in at $60 000 and almost every Commodore/Falcon is sold under $45 000.

            Use facts…………factually, not to support a baseless argument. Your information must be credible.

          • 0 avatar
            Pch101

            I find it amusing that I know more about Australia than some of Oi! Oi! Aussies who post here.

            The Australian tariff is double the US tariff. That’s not an opinion, that’s a fact.

            Australia has a luxury car tax, the US does not. That’s not an opinion, that’s a fact.

            Australia props up its auto industry with subsidies. That’s not an opinion, that’s a fact.

            The data on Australian exports and the comparison to the world market are a matter of public record. Those aren’t opinions, those are facts.

            You need to learn the difference between facts and opinions. I’ve offered facts, while you continue spew anti-American rhetoric filled with inaccuracies and half-truths.

          • 0 avatar
            Pch101

            I hate to break it to you, Al, but a Caprice (which is just a trim level of the Commodore) with a V6 has a sticker price of A$54,990, while the V8 model has a sticker price of A$59,990.

        • 0 avatar
          Big Al from Oz

          @Pch101
          You are forgetting the chicken tax? This tax would affect 50% of vehicles sold in the US.

          What about the design regs? Another added cost that’s equivalent to 26.5%.

          Pch101, you really need to be overt with your comments.

          You are not lying, but you are also not telling the complete story.

          You write just like DenverMike as well:)

          Makes me wonder.

          • 0 avatar
            doctor olds

            Pch101- has a very good grasp of facts about the auto business. Lord knows I don’t agree with him at times, but what he has written on this thread is on the money.

          • 0 avatar
            RobertRyan

            @Pch101,
            ” find it amusing that I know more about Australia than some of Oi! Oi! Aussies who post here.

            The Australian tariff is double the US tariff. That’s not an opinion, that’s a fact.”

            You and others seem to have amazing and intimate knowlwdge of THE CONSTRUCTION and BUILDING of US vehicles.
            Still you do not agree with with Alan Mullaly a great critic of unfair global restrictions who said quoting the main article.

            You know, this is the most open market in the world, the most competitive market in the world. There are more brands here than anywhere else in the world. There are more marques than in the rest of the world. This is a really competitive market and if you are going to get a chance to participate here, you have to be really competitive.”

            So what is stopping the US from being as Competitive. Trade restrictions/Unions ?

        • 0 avatar
          RobertRyan

          As Mullaly said in the above article:

          “option if they wanted to remain in the Australian market, what Mulally called the most competitive in the world. “

      • 0 avatar
        Big Al from Oz

        @ihatetrees
        Actually Australia isn’t highly unionised. Our level of unionisation is lower than in the US. I think from memory it’s less than 13% of the work force.

        As for tightly controlled labour markets, another no. I think we are freer than in the US. It is illegal to be like some of your states in the US with closed shops, ie Michigan. Unionism isn’t compulsory even in a union shop.

        We do have a minimum wage of $34,000US a year. We have compulsory superannuation. A truck driver in the Northern Territory earn about $100 000 a year. The person packing a shelf at our local supermarket is on $20 per hour. All of this adds to costs.

        The production workers at GMH were on an average of $64,000 a year. Uncompetitive.

        But, we can farm better than anyone else and dig dirt and sell it better than anyone else. Here’s a bit of info that might surprise you. Most any smart phone globally has a camera, they are all made in Sydney. Even laptops etc. The factory is fully robotic and employs very few people. The Australian business moved from China and set up shop here. That is the future.

        As for the cost of electricity it wasn’t the Greens that caused the price increases, it was the electric companies. What they had done is give the government predictions of increased electricity usage annually, to increase prices for infrastructure developement. What’s occurred is electricity usage hasn’t risen.

        This is causing a bit of an issue. It’s the government’s fault for poor governance in this area.

        • 0 avatar
          ihatetrees

          Ok, I’ll concede the point on unionization rates. US union rates are higher – I’ll work on my google-fu.

          But to state that AU labor markets are NOT “tightly controlled” with a $34K minimum wage and mandatory superannuation is incoherent. Those regs probably have some pretty nasty legal teeth (via Labor government enforcers) for violations.

          “As for the cost of electricity it wasn’t the Greens that caused the price increases, it was the electric companies. What they had done is give the government predictions of increased electricity usage annually, to increase prices for infrastructure developement. What’s occurred is electricity usage hasn’t risen.”

          Please. Why wasn’t, if what you say is true, a quick bankruptcy used when projected revenues were way off? Wipe out electric company shareholders, can their management, and sell their remains cheaply to new investors. Then, lower costs for customers. That’s how MARKETS work.

          My guess is that the electric firms were spared the axe thanks to their POS political operatives and influence.

          And don’t toss off the green / government regulation lobby as a non-cause. There’s ample evidence a few mouse clicks away about AU’s idiotic energy taxes and the sector’s inability to build new plants.

          “It’s the government’s fault for poor governance in this area.”

          Poor governance? No.
          High prices and disfunctional electric markets are a FEATURE, not a bug, of leftist, green-friendly, governments.

  • avatar
    doctor olds

    @BAFO- Manufacturing automobiles in Australia is a losing proposition without government intervention. For that matter, what will stop the 9% from withering away to nothing? What do you think can be manufactured competitively with your cost structure?

    The Australian government wisely wishes to maintain a “domestic” auto industry. The strategic value of such enterprise is recognized by our Canadian friends as well. Their government insists on GM maintaining Product Engineering in country, for example.

    The skill set necessary to run a most complex enterprise comes in handy for national defense at times.

    • 0 avatar
      Athos Nobile

      “The skill set necessary to run a most complex enterprise comes in handy for national defense at times.”

      It spills and benefits everywhere in the country. But some people sadly can’t understand that.

      And this is from someone that came from the 3rd world, where some countries are literally investing Billions in getting that skill set.

    • 0 avatar
      Big Al from Oz

      @DocOlds
      Australia manufactures and is one of the world leaders in biotech, agritech, pharmacuticals, bulk handling and storage equipment, miningtech, and on and on. Losing automotive manufacturing will not really impact Australia technologically as we will still design and engineer.

      Yourself being an supposed ex GM engineer would know that even in Singapore GM does design work. I know a GM designer/engineer there. So Australia will still do design/engineering for GM, dare I say even Ford.

      Australia is also putting in place the National Broadband Network. It will be the most comprehensive fibre optic network in the world. It is costing a huge amount of money.

      Like I state in this day and age whoever controls trade will do better than most. This NBN will give Australia another boost into industries we can’t even dream of predicting.

      The standard of living in the US isn’t based on manufacturing, look at the value the finacial sector and Wall St generate. It’s like our mining. The icing on the cake.

  • avatar
    Kenmore

    “The skill set necessary to run a most complex enterprise comes in handy for national defense at times.”

    This might interest you:

    http://origin.www.uscc.gov/sites/default/files/MichaelWessel_Testimony_SubcommitteeonNationalSecurityandForeignAffairs.pdf

  • avatar
    Big Al from Oz

    @Kenmore
    War and military is becoming very much an existence in cyberspace.

    Militaries started out he who controls land, controls trade.

    Once, some societies had control of much trade and wanted more they built navies, then it became he who control the seas controls trade.

    Then airpower came into play. Now it’s cyberspace.

    Manufacturing and industrial warfare ie WWI and WWII is the past, just like the Battle of Hastings which relied on bows and arrows, spear, swords and sailboats.

    The world is a changing place, get used to it or you will be left behind making bows and arrows.

    You see who ever controls trade generally has the most power. The US is slipping globally in this arena. Have a look at how some tiny nations like Singapore have a disproportionately high level of influence and control globally. Singapore has a large controlling factor in global trade relative to its size.

    The world isn’t so clear cut. Read up on history and economics and warfare. Look at how societies win and lose.

    Running out of money is a big killer of these societies

    • 0 avatar
      Kenmore

      The point of the article is that we’ve long since let the “strategic industry” horse out of the barn.

      The trail of Asian sourced components is so deliberately muddied at the source that tier 1 suppliers to the Pentagon often have no way of tracing defective product they’ve bought back to its manufacturer.

      And when they can be traced, that manufacturer simply dissolves operations and sets up elsewhere under a different name, then uses bribes and general American cultural incompetence to get the same contracts right back.

      Asia chumps us every time. Which was tolerable when we were big, dumb and rich. But as you say, that’s no longer so. Now we’re huge, decerebrated and broke. Sucks.

      • 0 avatar
        doctor olds

        @Kenmore- I am talking about the people with the knowledge to do all of it. The scientists and engineers as well as the managers of knowledge organizations. They can build stuff anywhere, even in China, as they have demonstrated.

        Manufacturing facilities are important, but they do not conceive, design, or develop the technologies, or even the product.

        They have the low level task of putting parts together after that sort of knowledge work is done.

        • 0 avatar
          Kenmore

          I got nothin’

          • 0 avatar
            Lie2me

            Drop a bomb on a server and watch what happens…

          • 0 avatar
            Kenmore

            Or just let them do a scheduled upgrade.

            About a month ago Cisco took out a DHS server by botching a VOIP upgrade.

            The Cisco techs knew it, reported it and then left the premises because it was a Saturday and they didn’t have OT authorization to stay and troubleshoot. They’d done their upgrade.

            Eventually enough heat was transferred that Cisco sent them back in and had things resolved after about a 5 hour outage during which my local node was flat dead with no internet/VOIP.

            And no, there wasn’t any redundancy or load sharing with the other servers. Like I’ve said elsewhere, fear lightning more than Big Brother.

    • 0 avatar
      mkirk

      So I suppose my next deployment will be to cyberspace then? Yes, it is important, but trust me, plenty of blood is still shed over land…after all, they don’t make it anymore.

      • 0 avatar
        Lie2me

        ” plenty of blood is still shed over land ”

        Especially if it’s sitting on top of oil

      • 0 avatar
        Big Al from Oz

        @mkirk
        If you are still in the military, have a look at how much we rely on computers and the networking of all of our assets.

        In the future it will be he who controls the global net controls trade.

        Auto manufacturing, as nostalgic and romantic you guys want to make it out to be is nothing. It’s a money earner or loser.

        Manufacturing can be set up anywhere any place quick quickly.

        Imagine what 3D printing will do in a couple of decades to manufacturing. 3D printing will hit the Chinese quite hard if it can be developed to ‘print’ anything simple from knives and forks to a key for you car that you lost.

        Motor vehicles will be 3D printed and assembled by robots by the time the young kids of today reach my age.

  • avatar
    doctor olds

    @Kenmore- The US auto industry maintains a high level executive exchange sort of program with the military, developing and maintaining linkages that might be necessary. At least they did in the recent past.

    • 0 avatar
      RobertRyan

      They are now “parceling” that out to foreign countries. which is pretty odd. One of the biggest suppliers to the US military and one of the Globally biggest suppliers is a nationalized foreign company.Times have changed for the US military.

    • 0 avatar
      doctor olds

      Actually, one of my son’s experience with levels of security clearance as an electrical engineer with the largest aerospace business in the world refutes the notion that the knowledge work is “being parceled out” regardless of what you read in the blogosphere.

      The security of high technology military system development is really very good.

      I can’t wait for you to deny that I even have a son.

  • avatar
    Jeff S

    @Big Al & Robert Ryan–Since this is your backyard I would like your take on Ford’s success in competing in the highly competitive car and truck market in Australia even with Ford importing their vehicles from Asia. With the Japanese, Korean, and Chinese competing how can Ford or GM compete? I understand why Ford is not going to locally produce their vehicles in Australia, but do you see a time when Ford might decide to just exit the Australian market completely (in other words just decide that even importing vehicles is not even viable)?

    • 0 avatar
      RobertRyan

      @Jeff S.
      The Car/truck utes do have a place in Australia. Yes the Ford Ranger/Holden Colorado COULD have been built here but costs weighed against that. Now all the free liquidity that was flowing around Asia from the US Federal Reserves bond buyback program is slowing down places like Thailand and even India are starting to stagnate. China has a “bubble” bit like the pre US GFC Market about to burst. They are already having their rather spectacular growth rate slow down, if the bubble does burst then all bets are off.
      Add into the above mix te new “Gunboat” diplomacy by Chinaand Japan and ‘sabre rattling” by Korea, Indonesia and the Phillipines and it is not a good reason to invest in Asia as a whole.

  • avatar
    Jeff S

    @Robert Ryan–Do you think Ford even has a chance to compete with imported vehicles from Asia? It appears the field is already crowded.

    • 0 avatar
      Big Al from Oz

      @Jeff S
      Ford and GM can compete with other Asian imports, even other US imports like the Fiat/Chrysler products.

      Remember Thailand is a major vehicle manufacturers in our region and the build quality is on par with Korean vehicles, which are almost as good as Japanese vehicles.

      Thailand produces Ford and GM products.

      It is sad that GM and Ford didn’t use the expertise here in Australia in vehicle design to take on the prestige market. I think that was one area Australia could have competed in. But at the end of the day why build prestigious vehicles here when the even the US is a lower wage country than us.

      I don’t envisage our dollar returning to the lower levels of a decade ago. Even back then government assistance was required for the locally made vehicles.

      • 0 avatar
        RobertRyan

        @Big Al From Oz,
        Agree about underutilization of local resources as regards vehicle design, which Ford belatedly took up with the Global Ranger.As far as Thailand, China and now rhe BRIC countries , that includes South Africa that also makes the Ranger, they ARE ALL HAVING problems.
        Australia COULD be eventually be a good place to make Auromobiles again.

      • 0 avatar
        SoCalMikester

        being a scooter and motorcycle owner and sticking my nose in?

        china is worst. stay away. way away. they just copy, have no standards and no dealer network. honda 150cc clones for everything.

        (south)korea builds some solid product

        taiwan? many japanese companies build low margin but good stuff there

        but still id trust japanese and USA built ( usually top dollar stuff) first

    • 0 avatar
      RobertRyan

      @Jeff S.
      Best answer is to look at how Ford is going against US MADE Toyota vehicles in the US market. Toyota has beaten them once this year. As regards US built vehicles competing against the Asians here, it would be much much tougher for Ford.Holden is second overall in the Australian market but WAY BEHIND Toyota in the overall Automotive sector percentages. I have a feeling with the current Ford Administration they will eventaully throw in the towel and leave. Fof desperately needs a new Vision. It could be made 8th Globally if Honda decides to take up the ball. Ford was FOURTH GLOBALLY Not that long ago.

  • avatar
    Lou_BC

    What is going on in Australia could be a sign of what may occur in the USA if trade barriers drop. The USA auto market is different in many respects due to brand loyalty. I can’t recall what it is for cars but it has been reported to be in the range of 40%. That is also effected by quality. Pickups on the other hand have a 70% loyalty rate. We’ve seen poor “foreign” penetration in the truck market but stellar “penetration” in the car market. Those factors were directly influenced by tariffs. Anything truck or truck like was protected and profitable. The USA industry went with SUV’s and trucks and basically handed the car market to foreign OEM’s.
    Australia is a much smaller market than the USA, similar population wise as Canada but an open market has killed the dinosaurs.
    Canada has the USA as the 800 lb gorilla in the neighbourhood whereas Australia has the Orient wearing the fur.
    Canada has its share of trade barriers in place. Oddly enough, those barriers were challenged in the world courts. Canada was going to let the rulings go unchallenged but politicians in the Canadian “auto belt” and the USA auto companies backed opposition to those rulings and tariffs were not repealed. It has been a huge benefit to American companies but has f^cked Canadian consumers. Our vehicles tend to cost much more than comparable one’s sold in the USA. NAFTA has helped USA companies to the exclusion of others. I’d love to see a truly open Canadian market but Ontario is the largest population in Canada and carries political clout. Even Conservative federal governments will not touch tariffs in fear of loosing votes.

    • 0 avatar
      highdesertcat

      Lou_BC, there is always a chance that you may be right.

      In the US the UAW may only be 6% of the American workforce, but they have an enormous political presence especially when they start to pool their votes and resources with other (American) unions.

      The UAW will only be happy if they can organize and unionize the workers who do not currently belong to any union, like at the transplants in the southern states. It’s about the dues!

      And because that is unlikely to happen in this current day and age with government mandates and regulations providing for the workers, many foreign manufacturers may be inclined to set up shop or expand operations in America IF the trade barriers are ever dropped.

      For them it is cheaper to produce in America and export back to their home country under a free-trade agreement.

      Since the UAW will find a way to exert its political pressure on the candidates they put in office, those candidates will fight to maintain the status quo and not lift any barriers to free trade, and push for card check and staff the NLRB.

      We have SOME choice in America as to what we can buy and drive. If the UAW has their way we’d have less choice of non-UAW produced vehicles in America.

      Things may be different in Australia.

    • 0 avatar
      SoCalMikester

      even ‘Murrica has mexican built stuff to worry about.

      the tide MIGHT be turning slowly back home to the states, but the big 3 brought it down there to begin with.

      VW, MB, BMW are building cars here to varying degrees of success but theyre higher margin. and probably dumbed down as far as assembly

    • 0 avatar
      Big Al from Oz

      @Lou
      Australia used to be brand loyal as well. This started to die out when the economy was opened up.

      The US will not reach the same level of uncompetitiveness as Australia. Or I should say shouldn’t. The only way the US will become uncompetitive is through irresponsible actions by the UAW, like the past and the Big 3 making poor judgement, in conjunction with the UAW/government.

      Australia’s is greatly influenced by mining/agriculture. Unlike manufacturing the price of commodities will rise substantially so investment into the country inflates the AUD. Canada will also feel the effects of commodities, but only half what we feel. Until Canada can find more minerals.

      That’s why even now Canada is more expensive than the US. Our wages are higher on average.

      So, to manufacture, simpler products, ie, motor vehicles, lower wage countries are you best option. Look at Mexico, Thailand, Sth Africa, etc.

  • avatar
    Lou_BC

    @highdesertcat – If you look at political contributions, Obama and the Democrats had huge contributions coming from unions. It is interesting though,many large corporations donated to both campaigns. Might as well hedge your bets.
    If one looks at the 2008 collapse. The USA would of lost Chrysler and GMC. That would of left Ford as the only USA company. One can argue that Chrysler is lost since they were sold to Fiat. The funny thing is that Fiat had to go to court to buy out VEBA stock. A legal challenge to a socialist organization taking place in the USA courts is ironic. But then again, the bailout was manipulated by the Dems to buy votes. The bailout would of occurred regardless of who was in power, but it would of changed which pockets were lined.
    GMC is government owned and since government is notorious for f^cking things up, one can view GMC as lost. GMC’s new trucks are a sign to me that they haven’t completely cleaned up their act. The fact that they handily outsell Ford globally but make 1/3 the profits tells me that “Old GM” is still around.

    • 0 avatar
      highdesertcat

      Lou, the USA did lose Chrysler and it cost America an additional $1.3B in bribe money for Fiat to take this “merger of equals.”

      By now we know which equal was more equal than the other.

      Regardless of how things unwound after the 2009 debacle, our much loved UAW has not learned one lesson from our national ordeal because they will drive Ford and GM into the grave again if they can, and continue to try to organize all the transplants in America so that the UAW can drive them into financial ruin as well. It’s all about the dues. Nothing else matters.

      The Old GM never left us. I believed in GM. Owned several blocks of stock in GM and cashed out prior to the death of GM. So GM did well (for me anyway).

      What Ford is doing in Australia, GM is doing in Canada, to some extent. GM is finding ways to maximize its utilization AND future profits.

      That ain’t all bad. But the real operative here really is Ford. It is the only American car maker left standing and it also is trying to maximize its utilization and profits.

      For Ford, I think this Australian plant closing is a good thing.

      For GM? Hell, who cares about GM? They didn’t even have enough fans to keep them alive and there aren’t enough buyers on the planet now that will bring GM up to a viable and self-sustaining company again.

      I would much rather follow the business philosophy of Alan Mulally and Sergio Marchionne than that of anyone at GM. Sergio marginalized the UAW presence on the BoD to the point where the UAW reps are innocent onlookers. Ford and GM, not so much.

      Like you said, GM sells all that product and makes nary a profit. And whatever profit GM makes is eaten up by its liabilities and losses elsewhere at a rate faster than GM can make the profit.

      The greatest innovations in the world don’t mean doodly unless the company can actually make a profit with them.

      Ford is doing the right thing, being responsible to its shareholders and owners. But because of the unions GM cannot make the cuts it needs to make, here and elsewhere, with the exception of maybe South Korea.

  • avatar
    Jeff S

    @Lou & Highdesertcat–My belief is that GM will not perish but become part of Ford or Chinese owned. GM is going back to their old selves, but their products are much better than they were pre-bankrupcy. If you read the article about Saab then you know the impossible is possible. A Chinese company is buying Saab. I seriously doubt if GM gets into financial trouble again that the Government will bail them out. More likely would be an arrangement similar to Fiat/Chrysler. GM has some good products with the new Impala, Cruze, Equinox, Lacross, and some of their other cars. GM should have done more with their new full size trucks, but they should sell well. Their full size trucks would have done much better with a few more changes.

    Ford itself is not problem free. Their turbo charge 4′s and 6′s in their cars have not been out long enough to be proven and their My Ford is still not up to par. That is one reason that we bought a new CRV over the new Escape. Price wise the Honda was more competitive even after the discounts from Ford. I am not saying that Ford is failing, just that some of their new products need some time to get the bugs worked out.

    I do agree with Big Al that global products are much more feasible and that eventually the US pickups will be more globalized in the future than they are now. Maybe pickups will still have a few distinctly American features, but they will also be more global. Containing costs and having more consistent quality are determining factors.

    • 0 avatar
      doctor olds

      GM is leaving Ford in the dust. GM were the number one sellers globally in the most recent quarter, are just edged out by Toyota for number 1 in the world for the first half. Ford is 5th and falling.

      Ford generates 90% of its global profits in F150 sales (roughly 15% of it in Houston and Dallas). Ford was not a lot more profitable than GM last year, particularly in NA, despite GM’s stale pickups.

      GM’s new trucks were delayed, but they are out now, and they appear to be very competitive- fuel economy and safety leaders, great low end torque and power. Take a test drive. You will want one. It is a great time to be in the truck market!!

      Nissan and Toyota will keep trying, as will Chrysler. Competition is likely to erode F-150 profitability, volume or both.

      GM presently gets 60% of their profit from Silverado/Sierra with a good prospect of increasing that with the new products.

      GM will be rolling out attractive new products at an increasing rate from now on.

      That might be why Warren Buffett has bet $Millions on GM.

      • 0 avatar
        billfrombuckhead

        There is not so blind as he who will not see. GM is kicking Ford’s butt to anyone not blinded by ideology. This new GM truck punches Ford right in the face. The Impala is a solid hit. Cadillac is surging. New GM fullsize SUV’s are on the way and those print will print money.

        How can it be called an Obama phone if it came out of the Reagan misadministration? I guess how Romneycare morphed into Obamacare. ROFL.

        Ideology make people blind to reality.

    • 0 avatar
      highdesertcat

      Jeff S, sorry about the delayed response. I could not get into this thread to reply to your comment. I tried for several days.
      ———————
      I’m not worried about GM dying. That will never happen. The US Government will never let that happen, no matter who’s in the White House or who runs Congress.

      It didn’t let that happen in 2009 when it should have and it won’t let it happen should future circumstances cause another bankruptcy threat.

      GM has indeed come a long way since its demise in 2009 and its products today are much better than its past products. We can all agree on that. Then again, when you’re on the bottom there is but one way to go, and that is up!

      You are right, Ford is not without is own problems. But I believe that Ford is doing the right thing and I would much rather bet on Alan Mulally and Sergio Marchionne to call the right plays than anyone at GM.

  • avatar
    Lou_BC

    @doctor olds – If you look at profits, GMC isn’t even creating dust. If one does a search of the Global 500, those statistics paint a totally different picture. For 2012 VW ranked #13 with 21,425.5 million in profits. Ford was #14 with 20,213 million. Where was GMC? Sitting at #48 with 9,190 million in profits. Ford made 2.2 times the level of profits that GMC did and isn’t even in the Top 5 for sales volume. GMC and Toyota are swapping positions for 1st and 2nd place with VW firmly in 3rd place.

  • avatar
    doctor olds

    @Lou_BC- The 2013 list ranks GM #22 to Ford’s #28, lists GM with both higher revenue and higher profits, revenue: GM $152B, F $134B. profit: GM $6.2B, F $5.7B

    http://money.cnn.com/magazines/fortune/global500/2013/full_list/

    Ford’s 2011 $20B profits included $11.5B attributed to “Benefit from Income Taxes”, sort of a one time event, not the result of operations.

    You wouldn’t know it if you believe what has been posted here for years, but GM is very, very much stronger than Ford and is presently selling more vehicles than anyone in the world as of the most recent quarter. Their profit is not where it should be, primarily because of European losses and stale pickup trucks in America. In addition, GM lost a huge portion of its sales revenue with the spin off of GMAC. They are addressing that by acquiring and developing GM Financial.

    I would stick with Warren Buffett on this auto bet.

    • 0 avatar
      Big Al from Oz

      @DocOlds
      I wouldn’t trust Warren Buffet. He’s in it for himself, not you, me or anyone. He would talk up his worst performing stocks just to gain 1c a share.

      • 0 avatar
        doctor olds

        @BAFO- “He’s in it for himself,…” Wouldn’t that mean that he sees value in the stock?

        As opposed to you or I, sitting on the sidelines chattering away,he is betting big money on GM, not talking about something, DOING something.

        I agree he is in it for the money. Your own words support my contention and re-affirm the lack of logic in your comments.

  • avatar
    Big Al from Oz

    @Pch101
    The luxury car tax doesn’t impact luxury vehicle sales at all.

    Australia has the highest ownership rate of performance vehicles in the world per capita.

    The Luxury car tax comes in at $60 000 and almost every Commodore/Falcon is sold under $45 000.

    Use facts…………factually, not to support a baseless argument. Your information must be credible.

  • avatar
    Big Al from Oz

    @Pch010
    Here is a comment you made.

    “Australia has a 33% luxury tax that is set that so it targets cars that cost more than the Commodore.”

    How does that affect the cost of Commodore, when in fact this tax does impact some Commodores/Falcons/HSVs/FPVs manufactured here?

    This tax is across the board and isn’t targeted at only imports.

    Imagine if the chicken tax was applied to Big 3 pickups manufactured in the US? That’s what this tax is doing in Australia, it impacts ALL vehicles, not just imports.

    Really, another UAW comment?????

  • avatar
    RobertRyan

    @PCH 101 and Big Al from OZ.
    From the Article and quoting Allan Mullaly
    “if they wanted to remain in the Australian market, what Mulally called THE MOST COMPETITIVE. IN THE WORLD” The US and every other market is not.

    • 0 avatar
      Big Al from Oz

      @Robert Ryan
      It shows that the Big 3 business model doesn’t work well in a truly competitive market place.

      I should say Ford and GM. Chrysler is increasing sales, but for how long. They have only been bit players since the mid 90s and since Sergio has been calling the shots they have increased their presence.

      I do think there is a lot more rationalisation coming our way over the next decade or two in the automotive industry.

      My way of thinking is expect the unexpected, and I don’t visualise GMC being a major player in a couple of decades, not with their insistence on being the manufacturer of the most and not most profitable. Ford will own them, I know the almost impossible to conceive. The US will not let GMC go to the Chinese unless the trillions that the US owes the Chinese can’t be met.

  • avatar
    RobertRyan

    @PCH101
    Tried posting this on the other thread, but it did not take.
    UNECE Standards are RECOMENDATIONS from a UN Commitee to Harmonize Global standards” As you are aware the US has differing standards within the US let alone outside it.

  • avatar
    RobertRyan

    @doctor olds
    “What kind of aviation industry exists in Australia? Do you have any manufacturing in this sector?”

    You do not understand the Australian Aircraft Industry..answer is Yes.


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