Mulally On Closing Australian Ford Plants: "Doing The Right Thing"

TTAC Staff
by TTAC Staff
mulally on closing australian ford plants doing the right thing

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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  • Big Al from Oz Big Al from Oz on Aug 25, 2013

    @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.

  • Big Al from Oz Big Al from Oz on Aug 25, 2013

    @Robert Ryan I had a similar problem this morning as well. TTAC blogs wouldn't show or register.