Ford Australia Secures Government Money, Raises Questions About Industry's Future In Australia

Derek Kreindler
by Derek Kreindler

Ford’s Australia branch is getting $34 million AUD (roughly $35 million U.S. dollars) plus an unspecified contribution from the government of Victoria (an Australian state), to sustain a Ford plant in Melbourne. Total investment is said to be roughly $105 million USD. Holden, GM’s Australian division, is looking for some government funds too, and its raising questions about the viability of Australia’s domestic car industry.

Holden has been negotiating for their own package, would help develop a new Commodore. More significantly is the fact that some money would be earmarked to help develop a next-generation Holden Cruze (nearly identical to our Chevrolet version), currently the sole small, fuel-efficient car produced in Australia. While Australian cars are generally thought of as being large, V8 powered brutes, consumer tastes have been shifting towards cars like the Cruze, which was Australia’s 5th best-selling car. The Mazda3 also unseated the Commodore as Australia’s best-selling car for the first time in 15 years.

In 2008, Mitsubishi closed up shop after getting government assistance to produce the 380 (similar to our Galant) . Production lasted a mere three years, even though the 380 was supposed to be the begging of a turnaround for Mitsubishi’s Australian operations. The 380’s failure has cast a shadow on Australian vehicle production ever since, and more importantly, advanced a notion among some that continued bailout money merely prolongs the natural death of a financially unsustainable plant or vehicle.

Of course, the deal has strings attached – some of the money must go towards making the Falcon, and the Ford Territory SUV, safer and more fuel efficient. While the Australian government hasn’t exactly told Ford that it needs to “ build a 40 mpg car“, we’ve seen shades of this before at home. The Falcon and Territory are under specific threat due to Alan Mulally’s “One Ford” doctrine which demands global variants of vehicles rather than market-specific product.

One analyst pegs the amount of government money pumped into the local industry at about $500 million per year since 2001, in a program that is supposed to run until 2020. One opposition politician even suggested that the car industry in Australia couldn’t survive without government assistance. Compared to America, the culture of government assistance seems much more deeply entrenched, and opinion is starting to shift towards the view that a perpetual appetite for taxpayer funds, especially for an industry that produces increasingly irrelevant vehicles (anecdotal evidence suggests that most Commodores, Falcons etc are bought by government and private fleets) and exports little is becoming unsustainable.

Derek Kreindler
Derek Kreindler

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  • Acuraandy Acuraandy on Jan 12, 2012

    Well, if they'd just export Falcons, Commodores (and Utes!) over here (for close to what the Aussies pay for them, currency adjusted), it would revitalize both GM and Ford's bottom line for both Holden and Ford Australia, and thus the US as well. Problem solved! Yes, I know, Commodore is available in the US (If you are a cop, as a 'Caprice'. Don't even get me started on the name). Thanks to CAFE standards, this probably won't happen; despite the fact that Americans ACTUALLY WANT THESE CARS! I'd love to see Ford's REAL excuse for not bringing Falcon to the US with the demise of the Panther. Falcon would've been a much more suitable replacement for Crown Vic than Taurus 'Interceptor'. I have yet to see a single one in law enforcement service; most departments around the Twin Cities have hoarded Crown Vics. I have however seen one Caprice, in white 'unmarked' livery. Too bad ANY car guy could spot it a mile away since it is cop-only, and had conspicuous 'POLICE' lic plates. The grille gives it away compared to the late, great Pontiac G8. See guys, I used to be a Detroit fanboy! I'd maybe (AND A BIG MAYBE) even give them a shot again if they brought these over to the US (something about $30k+ for a four-year old used G8 GT turns me off...)

    • See 13 previous
    • Outback_ute Outback_ute on Jan 15, 2012

      @Ooshley - true, a clean sheet gives you more options, but the FG weighs roughly the same as a BMW F10 5-series (not sure that is a good thing...), the main difference is the weight of the cast iron engine block vs the BMW's magnesium, the new Ecoboost Falcon will be about the same weight as base model 5-series. The FPV GT is 200lb lighter than an M5, both forced-induction V8's.

  • Bimmer Bimmer on Jan 12, 2012

    Of course Ford won't bring it here, you can actually see out of this car!

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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