Ford committed to October 2016
And will exit with dignity and honour intact, the blue oval insistsFord says an emotional commitment as well as commercial imperatives will ensure it keeps manufacturing the farewell Falcon and Territory until the official October 2016 shutdown of its Australian assembly operations.
Ever since the closure of local manufacturing was announced in May 2013, there have been question marks over whether Ford would complete and launch its FG X Falcon and SZ II Territory facelifts and then keep them in production until October 2016.
This week, the blue oval honoured part one of its commitment, with both new models launched to the press (you can read the drive reviews at motoring.com.au from Friday morning).
And Ford Australia's general manager marketing David Katic insists the second part of that commitment will be achieved as well.
"When we close in October 2016 we will hold our head up high and say we fulfilled every obligation that we said we would," he told motoring.com.au this week.
While Ford is on the record stating local production is a money loser, Katich says there are a number of reasons to keep building Falcon and Territory for another two years, rather than just call it quits on the spot.
"Firstly there is a market there for them and we have a lot of loyal Falcon, Territory and Ute owners who are very interested in these cars and that is a very critical point for us.
"If we closed down the day we announced, well we would have had to replace those cars tomorrow. So it was important that we continue to fill that customer demand, albeit at lower levels than 30 years ago, when we used to sell hundreds of thousands of Falcons and [Holden] Commodores."
Falcon sedan sales have dropped from 65,384 in 2004 to 10,610 in 2013. Territory sales, which have held up better, are still down more than 27 per cent year-on-year.
The plummet in Falcon sales was a key factor in the decision to shut down the assembly plant in Broadmeadows and the engine plant in Geelong. The October 2016 date reflects the following month's move from Euro IV to Euro V emissions standards in Australia. Ford judged that investment uneconomical for the locally-built 4.0-litre inline six-cylinder engine that is used by both Falcon and Territory.
Holden and Toyota will follow Ford out of Australian car manufacturing no later than the end of 2017.
Katic, a 25-year Ford Australia employee, said reaching the stated end date was also important for Ford's integrity.
"It was a very high integrity point that we give all of our employees and all of our customers time to make the changes that needed to be made and we are fulfilling those obligations," he said.
"You might think that's a romantic notion and if we were callous we would chop it off on the day we announced ... I grew up with a lot of people who work in that plant. The plant manager I have known for 25 years, and for us it was really important to treat everyone with a whole lot of dignity and whole lot of respect.
"You might not think that is important but at Ford we value that tremendously. So when we close that plant we will do it with a whole lot of dignity and respect for the people who have worked in that plant for 30-40 years."
Another factor in all this that encourages Ford to go in is the co-investment deals that underpin local production. The FG X and SZ II program cost $103 million, of which $34 million was contributed by the federal government.
Despite public perception, such deals are not simply a cash cheque, but come with a whole bunch of conditions, deadlines and financial penalties if the manufacturer does not meet its commitments.
"We will fulfil all those obligations," Katic said. "We have worked with our government partners right throughout this and communicated openly with them and they have been very understanding of our position.
"So we haven't had any negativity like that. That was part of the decision, there were lots of factors. But for us consumer demand, treating our employees and suppliers all with respect, they were very, very important.
"Fulfilling obligations to government – we will do that."
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