Friday, 24 May 2013

Ford closure goes with the territory

Ford closure. But, what about the torpedoed Territory Export program to Thailand, which could have helped save them?

Good to see the diversity of new posts on the site, including Ian's intriguing Redex Re-run series. (I still have some reading to do there).

Sticking with Matters Automotive, I  have just fired off the following to my federal and local reps, both of whom I know personally, and who are excellent fellows, and to Andrew Bolt. I should make it clear at the outset that I neither own a Ford, nor have done so for many years, but I do believe that the Territory is an excellent, international class leader, and that the next (and final, as things stand :-) Falcon, due out by 2015, will really knock socks off! (That's judging by the odd leaked report, artist's impressions and the like).
Herald Sun 24th May 2013. Ford Australia announces that it will be pulling out of manufacturing cars in Australia in 2016. Workers at Ford car plants at Broadmeadows and Geelong will lose their jobs and the Falcon will be history.
Since Thursday morning, every commentator and his brother / sister is right into caning Ford for a multitude of sins, and (at least from the Conservative side), the unsustainably high costs of manufacturing within Oz, But, no-one seems to be talking about the rotten ‘trick’ pulled by our friends in Thailand in torpedoing, after we signed a Free Trade Agreement (FTA) with them, a very viable plan to export the Territory there.
Cartoonist Mark Knight

So, to go back, and expand a little on what I sent out (slightly edited):
" ........ While the release of the Ford announcement on Wednesday morning was not a suprise to me (and no doubt to many, given Ford's previous commitment to stay in local production only to the end of 2016), it was nevertheless terrible. And I am still shaking my head over how that can be. I know, the high $A, changing customer preferences, apparent obstinacy of Ford International to help Ford Oz into export markets, Free Trade Agreements, crazy Union – satisfying industrial outcomes etc ..........  But for me, 2 self – inflicted things stand out:

    . Our aforseaid uncompetitive and bloated work rules.

    . Our insanely ineffective FTA’s with Thailand and Malaysia.


Surely the government, which signed up to them, must be accountable? A very viable plan to export the Territory to Thailand was castrated for Oz, very soon after the signing, by the Thai’s introducing a ridiculously punitive ‘Sales Tax’ on so – called large capacity vehicles (3 litre plus) of 80%!!  Our tariff on the shiploads  of Thai – built vehicles flooding Australia is 0%!! That killed the plan in the bud. Why didn’t Ford Oz scream blue murder? Who knows, but they didn’t rock the boat. Why were they so inhibited?


I have never really been a fan of Past Premier Bracks, but I think these comments on the topic by him, last year, are stark and worth revisiting: (Please Click Here)

Could this topic be discussed within the joint party room?

PS As I type, PM Gillard has come on Radio National berating Ford for not developing export business. Cringing stuff!!   :-(   "
Well, this may well end up in WPBs but I have got it off my chest, which was therapeutic. But I do hope it might stimulate something. A final thought might be for government to encourage some J/V partnership with a 'can do' overseas source of money and manufacturing know how. Indian Zillionaire Mr Tata springs to mind  - he has done amazingly successful things with eg, Jaguar. (Remember, you read this here, first!!  :-)
Cheers al


  1. Dale, thanks for adding the Mark Knight cartoon, Great!!
    Cheers al

  2. Here's founder of the IPE Des Moore's take on it:

    Closing Down of Ford

    Institute for Private Enterprise

    Media Release – 24 May

    Nothing could better illustrate the inflexibility of Australia’s system (sic) of workplace relations than the announcement by Ford that it will stop production in 2016.

    Why has Ford done this?

    There is more than one reason, of course. But Ford rightly drew attention to the high cost of production in Australia. And this is not simply the usual excuse trotted out by the ACTU and unions generally viz the higher exchange rate that has applied but now looks like moving down.

    A major problem has been the inability of Australian businesses to negotiate wages and other terms and conditions that allow those businesses to compete internationally.

    An important factor in the recovery of the US motor car industry was its ability to negotiate lower wages than had previously been agreed but were clearly out of line with more competitive industries in Japan and other countries.

    Such a solution was never considered here (or if it was it was discussed behind closed doors). Instead taxpayers have in effect subsidised the wage rates determined by our “fair” award system.

    Why wasn’t a negotiation approach considered? The simple answer is that, under the disastrous arrangements for regulating wages and conditions, it would never have been accepted by our so-called Fair Work system – a system that has set wage rates that are unfair to the workers now out of a job.

    Nor could the Gillard government have suggested such a process because it is beholden to the union movement.

    If Australia is to prevent the decline of our manufacturing industry it is vital that our next government take early steps to allow freedom for employers and workers to negotiate terms and conditions that allow our businesses to compete.

    Des Moore
    Director, IPE

    1. Could not agree more Geoff, but what chance 'our' voters being prepared to give an incoming government a mandate to make the necessary changes to 'our' World Leading workplace relations / Fair Work provisions? It's not just the pompadoured, prancing union chiefs (with the heavy muscle back-up of course) and left wing political sympathisers who have to be countered, it's also the hordes of better off 'intelligentsia' in the suburbs who find it beneath them (should that be 'beyond them'?) to bother getting into the nuts and bolts of such 'mundane' issues.
      We do need changes! ;-(
      Cheers al

  3. The radio was going in the workshop today and I half listened to some expert whom I failed to note their name. The view was put that Ford folded before Holden or Toyota because the latter two have export markets and Ford doesn't. Secondly Australia is a small market and it has become a difficult market to compete in because of the ever increasing choice of different brands & models of cars; currently somewhere in the vicinity of 300.

    Now Al points out that a export market almost came to be for Ford but was squashed at the 11th hour. Thailand imposing an 80% tariff while Australia imports many vehicles from there at a tariff rate of 0%.

    Now I know protectionism is a concept out of favour and any suggestion of it is howled down from both sides of politics. But the thought did occur to me that while it may not be best to have an industry based tariff; why not have a nation based tariff system where if a trading partner has no tariff we return the favour. If a unreasonable 80% tariff is imposed our nation ensures an equality in terms of trade by also applying the same rate.

  4. Well that sounds fair to me Dale. As for all the wankers blaming Ford for not diversifying into other export markets, some of the blame could be sheeted home to the US head office which seemingly has done nothing to encourage this by encouraging the obviously talented manufacturing and design expertise in Australia to build left hand drive models, international components or even a world car.
    I'm a Ford fan for life but I think Ford Australia is also woeful at promoting its products successfully such as the excellent, award winning four cylinder ECoboost Falcon which has great handling and dynamics, power similar to the six, but the economy of a four in a full sized family sedan. But how many have heard of this? When did you see it advertised on TV?
    They don't even push their case for fair treatment on the race track, where the current V8 Supercars Car of the Future program allows Holden to run 15 Commodores to six Fords (four factory/ FPR backed and two Dick Johnson Racing) plus four Nissans and three Mercedes. And Holden skites when it wins more races (15 out of 16 so far this year). It's a sham.
    Maybe after 2016 we could again see Ford Mustangs winning races in Australia as they did in the 60's in the US and Australia, using Fords much more hi-tech quad cam multi vale V8's that leave GM's old pushrod V8's in the dark ages.

  5. I guess there are 2 threads emerging here:
    1) Why has Ford Australia been so poor at promoting its products and expertise? The Australian design and development team is rightly held in top international regard for many undertakings, not just the Territory but the wildly successful international Ranger program, the Indian people's car and much more. But how much praise have you heard of for them? It has been said by aficionados that the venerable Falcon 6, in its current guise, would not look out of place in a BMW, it's that good. Surely it could have been further developed to a commonrail diesel version as well, with real export potential.
    Ford alone survived the US financial crisis relatively unaided, without falling on Chapter 11 Bankruptcy provisions, and requiring massive public fund bailouts, and here in Oz, their holding out the cap for government support has been vastly less than GMH's, by my recollections. The commercial motoring writers in the MSM have long looked on them with a jaundiced eye ........ I could go on, but simply say, 'Why?

    It's still quite a long time until end 2016. Perhaps I am naively alone in thinking that some common sense may yet arise here. At the very least, there should be much more transparency re the Free Trade Agreements into which Australia has entered, their fairness and outcomes. With respect to vehicle exports, the outcome would seem like Thailand 100, Oz zero, to silly old me.
    Cheers al

  6. Red and Green tape which inflates costs here is the source of product inflation tied to wages, its a dog chasing its tale in a spiral upwards.


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