End is nigh for Falcon?

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We've stood next to the Project Orion Falcon. It was padded up to confuse the eye at the time (more here), but this will be a car at least as different from the current model as the EA was different from the XF.

So, don't think of Orion as just an evolution of the BF. It is, but it's also as broadly different from its predecessor as any generation of Ford's large car since the XR Falcon of the mid-1960s.

Now, bearing that in mind, 2008 is year one for the Orion generation of Falcon. If AU to BF was one long model cycle and EA to EL was another long model cycle, Ford's model cycles run roughly ten years each, with a substantial evolutionary upgrade (a major change) around the midway point. Orion then, is the start of a new, long model cycle.

Commonsense dictates there won't be an entirely new car just two years after Orion's release -- a view confirmed by Ford insiders. A mildly upgraded Orion-based model will therefore adopt the Ohio-built Cyclone V6 for 2010 and beyond.

Orion is expected to continue for at least a couple of years beyond the introduction of the V6 before undergoing an XE to XF or ED to EF-style major change facelift/upgrade. The introduction of such a major upgrade to the Falcon will depend on a number of considerations.

The viability of local production (read exports, including Focus) will be one consideration, the domestic market share for large cars at that time will be another.

If Focus production (yet to start!) dries up due to changing demand here and abroad, Ford may decide to close shop at Broadmeadows. If everyone is driving small or medium cars by then, the cost of developing or re-developing Falcon will be too high an impost.

With Ford's Australian arm committed to building the Focus -- for export markets as well as domestic consumption -- alongside Falcon and its derivatives, the future of local manufacturing at Broadmeadows is, however, largely secure. Without Falcon and Territory production however, the Focus production alone would be just as fraught and as borderline viable as Falcon (and Territory) production is currently, if not more so.

Different media reports have speculated that the Falcon could, from the introduction of a hypothetical major change Orion in 2013, be the basis for Ford's global rear-wheel drive platform. The speculation arose from comments made to the American press some weeks ago.

In other media reports, journalists have posited that the major change Orion or a post-2012 model Falcon might be engineered in Australia, but built in North America for US consumption and exported back to Australia. This too would leave the local manufacturing plant without enough capacity to justify its continuing operation, as explained above.

While Ford admits to needing a large RWD car in its portfolio, Ford's global manufacturing chief, Joe Hinrichs, was reported as saying that exports to the US from Ford's Broadmeadows plant were hard to justify from a cost perspective.

This has led local media outlets into a frenzy of -- occasionally conflicting -- speculation, not unlike the Chicken Little observations that prevailed when Toyota's Executive Vice President Global Planning Operations, Tokuichi Uranishi expressed doubts about the on-going viability of that company's plant at Altona (more here).

Uranishi was -- we believe -- merely laying the ground rules to put the Australian government in the right frame of mind with the upcoming ACIS (Automotive Competitiveness and Investment Scheme) industry review this year.

Tom Gorman, announcing his resignation from the post of President at Ford Australia, categorically refused to confirm that Ford Australia would necessarily play a strategic role in the development of the global RWD platform.

"That report is an interpretation of a conversation, as opposed to a specific announcement from Ford", he said.

"I don't think we've changed our tune at all, which is we think we produce an incredible series of rear-wheel drive products and we want a seat at the table in the global rear-wheel drive initiative. That's not changed from what I've been telling you for months.

"If you look closely at what Derrick Kuzak said, he was really talking about we could play a role and that is unchanged from what we've been saying. We're still really in the early phases of that and working closely with the team in the US."

What's our view?

We believe that the Orion Falcon will continue through to 2012 or longer, with first the inline six and subsequently the V6. It will not adopt a global platform subsequent to that, unless Ford Australia is heavily involved in the development -- or redevelopment for the Australian market. 

Assuming the global platform gets the go-ahead (and potentially, that decision would be based at least in part on Pontiac's success or otherwise with the Commodore-derived G8), Ford may choose to build US domestic production on this platform in North America and leave Ford Australia to continue building a Falcon variation at Broadmeadows.

There may be some parts rationalisation and components built and shipped from one country to the other, just as Ford Australia is about to do with the V6 engine. Ford on both continents will gain from an engineering cross-pollination and will avoid some of the mistakes GM has encountered along the way, importing Holdens into the US, to be sold as Pontiacs.

Of course, much also hinges on the outcome of the ACIS review. In other words expect more posturing and little concrete before then.

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