Revealed: Ford's secret ute plan to save Broadmeadows factory

[SpoolMan]

From Todays HeraldSun Online

FORD Australia studied a radical plan to replace the Falcon on the Broadmeadows production line with a heavy duty pick-up - now the third biggest market locally behind small cars and SUVs, and Ford’s biggest seller last year.

But the proposal to make the Ranger utility in Australia rather than import it from Thailand was shelved at the eleventh hour as the strong Australian currency made its export potential unviable.

The revelation comes as the output of Ford’s Broadmeadows factory - which makes the Falcon sedan and ute and the Territory SUV - fell to historical lows in an all-time record year for new-car sales in 2012.

A top-level automotive industry analyst in Detroit told News Limited overnight that Ford Australia went "a long way down the road" with plans to replace the Falcon and Territory with the Ranger pick-up and its as-yet unreleased seven-seater 4WD wagon equivalent.


Instead, the Ranger is imported from Thailand with a zero tariff because of the Free Trade Agreement with that country, even though the vehicle was designed, developed and engineered in Australia.

"It would have made perfect sense to build Ranger there (in Broadmeadows)," said former Detroit auto executive Jim Hall, now an expert analyst who contracts to the industry. "Especially when you consider how big the market is for that vehicle locally, and it’s export potential. And, believe me, Ford Australia came very close."

Because of Australia’s Free Trade Agreement with North America, the Ranger could be exported there without the hefty 25 per cent tariff on imported pick-ups to protect US manufacturers. Pick-ups outsell cars in North America.

But, Hall says, the strong Australian dollar and a change in US legislation on fuel economy standards - which favoured improvements to the larger, US-made Ford F-Series pick-up rather than introducing the more economical Ranger - nixed plans to build the Ranger in Australia.

"It’s a classic example of legislation intended to do one thing but has unforeseen results," Hall said.

Conservative estimates forecast Ford Australia could sell up to 50,000 Ranger utes and SUVs locally - the Ranger outsold the Falcon and Territory last year as a ute alone. Broadmeadows built 37,000 vehicles last year, its lowest annual output since it opened in 1960.

Instead, Ford makes the Ranger in Thailand, South Africa and Argentina. The vehicle is sold in 180 countries - more than have McDonald’s stores - but not North America.

Ford executives would not comment on the axed Ranger production plans for Australia.

But the CEO of Ford globally, Alan Mulally, told News Limited at the Detroit motor show overnight "we will continue to evaluate" the future of Broadmeadows’ manufacturing operations.

"We’ve got good operations in Australia, we continue to invest in our product... but we will continue to evaluate that going forward," Mulally said.

Ford has so far committed to Australian manufacturing until the end of 2016 and plans to introduce an updated Falcon in 2014. But the outlook remains bleak if sales don’t recover.

Ford’s global marketing chief Jim Farley told News Limited at the Detroit show overnight: "The segmentation [of the large-car market] has been disappointing but it’s the reality. Customers have been voting with their pocketbooks.

"Certainly [Australia] is a challenge. We believe in the Falcon, we believe in the Territory, we believe in Broadmeadows. [But] beyond 2016 is another step.”

At the Los Angeles Motor Show late last year Ford’s newly appointed chief operating officer Mark Field told News Limited that a decision to close Broadmeadows has not been made.

"We’ve made the investments in Broadmeadows that take us to 2016, and we’re in the process of looking at our plans and understanding what we can do going forward," Fields said. "Beyond 2016, in the next couple of years we’ve got to make those decisions because of the [manufacturing] lead times."

Analyst Hall says he believes Ford headquarters in Detroit is yet to decide the fate or future of Broadmeadows.

"It’s my understanding a decision has not been made," Hall said. "No matter what happens, I’m convinced Ford will keep their engineering and design facilities in Australia. It’s too important for the region, plus they contribute great expertise to Ford globally."


Joshua Dowling, National Motoring Editor, in Detroit
News Limited Network
January 15, 2013
This reporter is on Twitter: @JoshuaDowling

http://www.heraldsun.com.au/news/nat...-1226553969257

[FalconXV]

When I read the title, I was thinking RTV, or a mining based Falcon.
What a shame, to think we could have had an I6 Ranger, with a turbo variant...
This article seems more matter of factual, maybe JD has taken heed of the backlash of his usual work.

[aquahead2001]

Interesting article, however its still another example of how close Ford Australia got to a secure future, to be pipped at the post once again... I also wonder how far the actual business case got, what with a high Aussie dollar and an extremely cheap and already tooled up production facility in Thailand.

In reference to the 25% tariff on imported pick-ups, the so called "Chicken Tax" only applies to certain countries or locations. Europe, Asia etc. However, there are places that are excempt, where there's a free trade agreement, here, for example and places that are part of the USA's 'African Growth & Development Act", such as South Africa. Where the Ranger is already being built...

[Raptor]

They may well have run the numbers but this would never stack up against Thailand production, which is a shame but that's the reality of it. There's also no way that Ranger would have got an I6 or I6T just because it was made here either. That's not a global engine but our own Aussie orphan.

[lockieoc]

The Ranger being made in Thailand makes more senses.
They forgot to mention that Thailand is the pickup capital of the world (per capita). So why make the Ranger here?
Why would you compete with other Thai made pickups with an Australian made one?
N.A don't need another pickup when the F150 does the job perfectly fine.

[turbodewd]

The large car segment is indeed a smaller than what it was once. the Commodore OR Falcon should still be produced in Oz, but I dont think we can sustain both. Happy to be proven wrong.

Do Terri and Falcon sales combined now beat the commo??

[EDManual]

the cruze would also never stack up...its only govt help that made it work. Thats the only way this would work too Id say.
Too bad, would have been good!

[Joe5619]

It's a shame it didn't happen. But if the high dollar is what killed it, then things don’t look good for manufacturing in Australia unless the dollar drops quick & heaps.

I still hold hope they'll come up with something that works for manufacturing in Australia.

And that is how journalising should be done!!

[csv8]

RAPTOR anyone ???

[BroadyFord]

Honestly, the high Australian dollar is poison for the entire Australian economy. It needs to be halved so that the destruction can stop once and for all!

[BigAL_250]

Interestingly there is also another article from him posted just after this one, the reverse article you might say, a slightly gloomy outlook about the Commo (and it's engine plant).

http://www.adelaidenow.com.au/holden...-1226554002811

edit: was already here, http://www.fordforums.com.au/showthread.php?t=11386466

[Yellow_Festiva]

180 countries???? Can that be confirmed independently? There is only something like 200 countries / independent states give or take (depending on the politics at the time) on the whole planet.

If it is true that is an amazing feat!

Then again, it could be a play on words "Is able to be obtained in 180 countries" would be better.

It would be good to see Broadmeadows continue to produce cars into the long term future, we need more people employed here, not less!

[SpoolMan]

Can we keep the Holden discussion out of this thread, if it warrants a worthy discussion start a thread in the appropriate Forum area.

[Gobes32]

What a crying shame it never went ahead. Mining companies could have bought "Aussie Made" cars for their mines instead of the imports that currently dominate the mining landscape. Can anyone explain the benefits of a high dollar, besides the fact new TV's have never been cheaper?

[csv8]

Originally Posted by Gobes32

What a crying shame it never went ahead. Mining companies could have bought "Aussie Made" cars for their mines instead of the imports that currently dominate the mining landscape. Can anyone explain the benefits of a high dollar, besides the fact new TV's have never been cheaper?

Holidays/shopping in America are cheap !!! Pity cars are L)hand drive !!!

[aquahead2001]

Wikipedia says 206 independent states:

http://en.wikipedia.org/wiki/List_of_sovereign_states

So 180 counties is achievable, if not a little hard to believe!

If we had an exhange rate of say US$0.75, then I reckon we may have stood a chance to build the Ranger/Everest, but not at partity or above... But if we had an exhange rate of US$0.75, I also think Aussie made cars would still be a very attractive value proposition and maybe the Falcon would still be selling as well as it once did!

[TP351]

Originally Posted by Yellow_Festiva

180 countries???? Can that be confirmed independently? There is only something like 200 countries / independent states give or take (depending on the politics at the time) on the whole planet.

If it is true that is an amazing feat!

Then again, it could be a play on words "Is able to be obtained in 180 countries" would be better.

It would be good to see Broadmeadows continue to produce cars into the long term future, we need more people employed here, not less!

Yes it's true. It's available in virually every country/territory except for Nth America.
Coding all of those different markets into the system was an absolute nightmare! Given all of the different market specifications & legal requirements.....

[Gobes32]

Originally Posted by csv8

Holidays/shopping in America are cheap !!! Pity cars are L)hand drive !!!

But once again it does not benefit the Australian economy. It seems we would be much better with a low dollar. The high dollar is eventually going to kill Alcoa's operations here in Geelong, and that is coming from my father who has worked there most of his life.

[robertjp]

Originally Posted by Gobes32

But once again it does not benefit the Australian economy. It seems we would be much better with a low dollar. The high dollar is eventually going to kill Alcoa's operations here in Geelong, and that is coming from my father who has worked there most of his life.

Due to a artificially low US $ and Chinese equivalent. What is worrying is what will happen when the Aus $ drops, where will be the manufacturing sector which could have made up the shortfall? Govt policies of the last 20 - 30yrs coming home to roost, with we the public left to carry the can.

[b0son]

Originally Posted by robertjp

Due to a artificially low US $ and Chinese equivalent.

And the euro? No, our dollar is high, you cant keep blaming the USD.

Our RBA has for too long believed their own crap about the strength of the economy. The rate cuts should have started years ago.

Govt policies of the last 20 - 30yrs coming home to roost, with we the public left to carry the can.

And we'll deserve it, because we let them. We're regulating ourselves out of existence.

[robertjp]

Don't disagree, but when will the penny drop or has it been stolen as well?

[davenl5l]

sadly i don't think most people have/had a penny to drop(and i'm not talking money)and that's why we are stuffed

[bmorris]

Originally Posted by Gobes32

What a crying shame it never went ahead. Mining companies could have bought "Aussie Made" cars for their mines instead of the imports that currently dominate the mining landscape. Can anyone explain the benefits of a high dollar, besides the fact new TV's have never been cheaper?

Don't expect mining companies to be buying commercial 4wds for much longer. There is competition in that market. So it would be wrong to think mining companies would have bought lots of rangers

[BroadyFord]

Originally Posted by b0son

And the euro? No, our dollar is high, you cant keep blaming the USD.

Our RBA has for too long believed their own crap about the strength of the economy. The rate cuts should have started years ago.



And we'll deserve it, because we let them. We're regulating ourselves out of existence.

The US are printing more money than ever before, thus keeping their currency artificially low. The AUD is seen as a safe haven currency that surges on the slightest whiff of optimism in the global economy, hence why it plunged during the GFC.

Rate cuts have been completely ineffective in lowering the dollar and with not much more room to move on rates, the RBA cannot do much more bar directly intervening to lower it (unlikely to happen).

I think the dollar will continue to climb and with it, we will see a lot of industry shut down. As someone above mentioned, Alcoa is finished in Geelong next year and Ford will struggle to build anything in Broadmeadows that has export potential.

[SSD-85]

I fail to see how the first part of that article is relevant "now". Friggin' JD. I can see that "IF" the Falcon dies, he will create endless articles on how it couldve been saved. Oh well, typical journalism.

And if Ford US honchos believe in the Falcon & Terri so much, then why is so little offered in the way of helping them? But thats just speculation. They could be planning something awesome within the "One Ford" archecture. One can only hope.

[1TUFFUTE]

Originally Posted by SpoolMan

Can we keep the Holden discussion out of this thread, if it warrants a worthy discussion start a thread in the appropriate Forum area.

do we have to keep the Joshua dowling comments out aswell because id bet my house hes being nice in the media under duress and posting some slight negative GM reports simply because of the massive problems hes caused from his biased writing recently
On topic....ranger here? pah I doubt it

[jpd80]

If JD has his finger on the pulse of the car industry, why is he onlly revealing this story now when
most others on Ford forums have known about this as rumors for years, some "rumors" are veiled facts....

Next he'll be talking about how FoA only just missed out on winning the supply contract for the Duratec 35/37 nearly ten years ago...

[Polyal]

I fail to see how this is news, fact, rumor or anything of interest. Matters little about what they studied and never put into plan..its almost like a GMH article. Sure it makes the blokes on the line feel heaps better...