Falcon and Territory to live on?

The boss of Ford Australia, Marin Burela, has attempted to quell speculation that local production of the Falcon and Territory may not survive beyond their current model cycles.

With the Falcon poised to record its lowest ever result in the history of the nameplate for the third year in a row, sales of large cars declining at a faster rate than the rest of the new-car market, and Territory sales waning, Mr Burela was asked if local manufacturing of those vehicles was still viable.

"We wouldn't be investing the money that we are, ... the $230 million, unless we were confident that there was opportunity for us as we move forward," he said.

The Territory is due for a major overhaul next year and a new Falcon was released last year, which means both locally-made vehicles would be due for replacement around 2014.

When Ford reversed its decision to shut the Geelong engine plant, some industry observers suspected that meant Ford would shut both the car assembly and the engine factories at the same time at a later date -- once the current models had run their course.

But Burela insists Ford Australia is still continuing on its current path, and its design and engineering departments are planning future models of the Falcon and Territory.

"The reality is those decisions won't be made for another 18 months or so," he said. "So we are still going full steam ahead."

He said he understood why there was constant speculation about the viability of Ford's local manufacturing operations, and that's why Ford had to make some "tough decisions" over the past 12 months, including cutting its workforce, a process it called "right-sizing the business".

"[Federal Minister for Innovation, Industry, Science and Research] Kim Carr and the unions and you guys [the media] keep asking me 'what does this means for Broadmeadows'? Well I say this to you. The most important thing for us was to right-size the business, and establish a sustainable business base that didn't rely on exports.

"This push on exports is all good and fine while the exports are there. If the exports dry up, like what happened to one of our competitors, and then you fall off the edge of the cliff, what do you do?

"Our business has to be able to sustain itself on what we do in-country.

"Anything that you then do over and above that becomes the cream on the cake.

And that has been our focus."

However, one of the biggest drivers of the local automotive industry, Senator Carr, is on record as saying exports are key to survival.

"You have to listen very carefully to what Kim Carr says," Burela said. "There are many different things in the auto business. There's the supply base, there's technology development, there's local production, local market, exports."

He said the Rudd Government was the most supportive he'd encountered anywhere in the world in his 25-year career with Ford.

"When I look at what Kim Carr has been doing and what Kevin Rudd has been doing, I'd have to say to you that they are one of the very progressive governments that I have interfaced with over many years.

"It shows tremendous leadership. I've been here 12 months and I have been extremely impressed. They are very focused on saying 'what are the key strengths, how do we build on them?'."

He said Carr recently took a delegation of suppliers to China. "He's created a group that will be directly interfacing with Chinese business entities, local manufacturers and suppliers."

Mr Burela also said Carr had met with top level management of GM and Ford in Detroit.

"He was very bullish in terms of saying 'we as the Australian Government are very keen on making sure that we participate in global automotive growth, whether it be technology development, whether it be research and development,' and he really played to the Ford Motor Company's strengths on that.

"While he's there promoting that, here we are developing the new Ranger [ute] program for the world."

When asked if local car manufacturing would survive without Kim Carr or a supportive government, Mr Burela said: "I would say this to you. The leadership that's been demonstrated and the passion and the energy by Kim Carr, by the Prime Minister, by John Brumby, by Martin Bakula here in Victoria, and a whole range of other governmental bodies, in terms of looking for ways to exploit our technical knowhow, innovation, manufacturing, creating opportunities, has been I think a progressive step."

Would a change of Federal government at the next election spell disaster for the car industry?

"My assessment is that I don't think a change of government, if that were to take place, would change the overall view of having an industry here.

"I think, recognising how far the industry has moved, that any change of government would continue to be very supportive.

"Every government will obviously have their own flavour on things, and that's fine, and it's our responsibility to work with all governments, as we have over 85 years in Australia, but I think they would be supportive."

Mr Burela said he had already held talks with those in opposition.

"The opposition on the other hand, I've also interfaced with them. The dialogue has been incredibly positive," he said.

"How can you not respond to an industry that provides over 60,000 jobs?

"Its exports, in terms of vehicles and research and development, exceed $5 billion a year. It has a supply base that has matured over the years and can expand offshore. It has an automotive industry that's closely connected to its parent, whether it be Toyota, Holden or Ford."

The Australian dollar's foreign exchange rate was the other big challenge for the car industry, he said, because a strong dollar hurt the export of cars -- and placed added pressure on locally made cars because it made imported vehicles cheaper or better equipped.

"As a manufacturer, the dollar is killing us right now. As an importer it's not so bad," he said.

"But I think the Australian dollar will always continue to fluctuate. What is the right value for the Australian dollar? I don't know, you tell me."

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