Ford's fate sealed 15 years ago

Ford Australia's manufacturing future was doomed as early as 2000 – long before the Territory was launched as the nation's first and last homegrown SUV – says the company's Asia Pacific product development chief Trevor Worthington.

Speaking at last week's launch of the final Falcon and Territory, production of which will cease by October 2016, the China-based former Ford Australia chief engineer said a range of factors put the writing on the wall for Ford's Broadmeadows and Geelong plants, which date back 90 years.

Worthington cited the flood of cheap imports due to reduced import duties and a lack of export opportunities due to the strengthening Aussie dollar and Ford Australia's non-global vehicle platform as chief reasons for its manufacturing demise.

"You didn't have to be a rocket scientist to see it coming," he said. "The large car segment is less than five per cent of the market – just five years ago it was 15 per cent".

"Lack of protection, the strong Australian currency, unique product and the opening up of the ASEAN region were all factors."

Asked if Ford's aborted plan to produce the Focus small-car here would have saved its Victorian factories, Worthington said: "No, just look at Holden [and sales of its Cruze]. To some extent they've got a much harder challenge than we've got."

From humble beginnings assembling Model Ts in Geelong in 1925, Ford Australia invented the ute in 1934 and went on to sell millions of Falcon sedans, coupes, utes and wagons from 1960, with production peaking at about 85,000 in the mid-1990s.

Sales have plummeted since then, however, with less than 9000 Falcons sold this year with a month to go, and production shrinking from 260 vehicles a day as recently as 2010 to just 83 a day since June this year – a figure Ford has no plans to change despite the release of its facelifted FG X Falcon, upgraded SZII Territory and new XR8.

In the face of inevitable factory closures despite ongoing government subsidies, Worthington said Ford made the decision four years before the Territory was launched in 2004 to focus on pitching for regional and global product development.

The first result of that was India's Fiesta-based Figo, followed by the Focus-based Escort for China, and then the global Ranger and Everest SUV.

"When I came back from the US in 2000 — before we'd even done the Territory — we got the PD team together and asked 'do we want to lay down and die or create our own future?' because there was a limited life in large rear-wheel drive.

"So Figo for India was the first regional product and the first global products stemmed from that. The team is fully capable

While all of its 2500 factory workers will be gone within two years, Ford Australia now employs 1050 design and engineering staff as part of the 2800-strong Shanghai-based Asia Pacific product development team, which is Ford's third largest behind Dearborn in the US and Cologne in Germany, and one of just four capable of building a vehicle from concept to reality.

As we've reported, Ford Australia is in the process of doubling its design team, which currently employs less than 90 staff but will be working at full capacity with a staff of about 180 by the end of the first quarter of next year.

With the addition of another 150 engineers within six to eight months, Ford Australia's total PD team is expected to number more than 1200 for the next three years, spread across its Melbourne design studio, Geelong R&D centre and You Yangs proving ground, making it Australia's largest vehicle development outfit.

Ongoing projects including the Everest and facelifted Ranger — both of which goes on sale here in mid-2015, plus calibration work for the Transit and a replacement for the US Taurus.

Ford will not reveal exactly which products it is working on or which of them will be sold in Australia, but Worthington made it clear Ford Australia's engineering skills are in greater demand than ever.

"For the next two years at least there'll be more work than we can handle," he said. "The nature of the work is cyclical, so we may have 1200 or so for a few years then we'll let some go. The mix of permanent and contract positions will dictate how many stay, and who we hire and when depends on what jobs they do.

"The maturity, flexibility and quality of the team is such that there's no reason it won't stay at that number [1200] for a long time. Australians are always up for a challenge. If it's not V8s or turbo sixes it's small cars..."

Worthington said about a quarter of Ford's Shanghai-based PD team is Australian, including 30 Ford Australia engineers on permanent assignment at the company's Nanjing R&D centre, and that between 50 and 100 engineers travelled between China, India and Australia during durability validation work on the Everest.

"We're still working on Everest and as Escort finishes there'll be plenty of cars to fill the proving ground," he said. "As we ramp out of projects like Escort, more products come on stream and the net result is more work.The fact we're ramping up our PD team is ample evidence that we're on the right track in nurturing our process here."

Worthington said most of the engineers it will hire for chassis, powertrain, calibration, instrument or 'top-hat' development work will come from outside Ford, while many will come from Europe and some will come from Holden, which has already reduced its R&D workforce before it ceases manufacturing in 2017.

"People love to come to Australia because it has a great reputation. A lot of people are also approaching us from Holden, but unfortunately a lot of the Holden guys are going overseas."

The previous week Holden sacked the first of 200 Melbourne-based engineers that it will let go before Christmas, ahead of a further 400 engineering job losses before Holden closes its factory doors in three years, leaving it with less than 150 engineers. That will make Ford's Australian R&D effort will be about 10 times bigger than Holden's, which will be larger than that of Toyota, which also shuts its factories in 2017.

Worthington said the launch of the last Falcon was a poignant moment in Ford Australia history, but was proud of the end result, which will be one of many Australian engineered vehicles sold by Ford for the next few years.

"I'm personally disappointed but every cent we spent on Falcon and Territory — and when we spent it — were the right decisions and I wouldn't have changed a thing.

"Of course every product can always be better but if they were 10 per cent better would the outcome have been any different?

"I can honestly say the product range we'll have within the next two to three years will be the best we've ever had in terms of dynamics, efficiency and design. For the money we've spent we're getting a great looking Falcon including an XR8 with 335kW.

"We won't sell 100,000 but it's a great way to bow out."

Apart from the final Falcon and Territory, Ford Australia will release the new Everest, facelifted Ranger, new Mondeo, facelifted Focus and new Mustang in 2015. None of them will be built Down Under, but at least there'll be a little bit of Aussie in some of them.

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