Ford's new focus on export

In a dramatic turnaround from the Australia-only focus of Ford's local operations, Ford Australia President Mr Tom Gorman today announced a $1.8 billion commitment to new projects and facilities spread over the next 10 years as Ford Australia takes on the global role as an engineering and design "centre of excellence".

Australian Prime Minister Mr John Howard announced a $52.5 million assistance package developed in conjunction with the Victorian Government to help Ford Australia clinch the pivotal new investment over tough international competition.

In a vote of confidence for Australian achievements, not just Ford's, the Ford Motor Company Chairman and CEO, Mr Bill Ford said: "The skills and technologies available in the Australian marketplace are some of the best in our global organization."

Ford Australia executives confirmed that the local transformation of the BA Falcon, the clean sheet local design and development of the hugely successful Ford Territory and the development of the award-winning Ford Fiesta sedan for India, has allowed them to capitalize on their strategic location within the increasingly important Asia-Pacific region.

Prime Minister Howard pulled no punches on why his government was supporting the initiative. As the focus moved to Australia's booming mining and resource sector, the importance of manufacturing for future work opportunities must not be overlooked according to Mr Howard, and must remain "at the heart of Australia's economic experience."

He also noted that by 2015 the most radical change since the Industrial Revolution would see "the centre of gravity in the middle classes shift from traditional Euopean and US markets to Asia." Mr Howard observed that this opens up enormous opportunities for Australia to support this growth.

The content of the Australian Government assistance package reflects the intent of Ford's new commitment to create 273 new jobs and underpin the security of 6000 existing jobs in current Ford Australia operations.

Victorian Premier Mr Steve Bracks noted that the Ford investment will boost Victoria's economy "by $120 million per year and generate a further 1200 indirect jobs for local suppliers and service providers."

The assistance package is contingent upon a Ford undertaking "to provide the Australian automotive components sector with every fair and reasonable opportunity to supply the necessary components for these projects."

Victorian Treasurer and local Broadmeadows MP, Mr John Brumby noted that each of the world's top three car companies had now chosen Victoria for their new major global design centres.

When a similar announcement from Holden included the setting up of a new faculty at one of Victoria's major universities, it is now apparent that economies of scale in the provision of training and resources have become an important factor in the support structure of these massive new facilities. 

In Victoria alone, according to Premier Bracks, the automotive industry employs 28,000 people turning over $10 billion while generating exports in products and services of $2.7 billion.

The $52.5 million assistance package will be allocated to the following:

• $40 million for the design, engineering and manufacture of the next generation E8 Falcon and Territory at Broadmeadows and Geelong as it takes on a more global role as Ford's most advanced rear-wheel drive vehicle

• $12.5 million for the design and engineering in Victoria of an all new light commercial vehicle architecture that will have a variety of body styles and configurations. The light truck version will be manufactured overseas and marketed in more than 80 countries under the Ford brand in both LHD and RHD variations.

What does this mean to Ford Australia employees and Australians?

In exclusive interviews with Ford executives at the announcement, CarPoint was able to piece together the changes Australians are likely to see as a result:

• The Falcon will continue as a state of the art all Australian rear-drive model and not, as many feared, an unwanted variation of an offshore front drive platform,

• Expertise gained from engineering the LHD and RHD versions of the new commercial will be transferable to the new E8 Falcon and Territory increasing the potential to open up new export opportunities,

• New facilities and technology that will improve quality and reduce time to market for export projects will have an equally dramatic impact on the competitiveness of local models,

• Major infrastructure upgrades and building expansions will occur at Broadmeadows, Geelong and the You Yangs Proving Ground as the extra responsibilities are spread throughout the three facilities. This should increase opportunities for residents who live in the Broadmeadows, Werribee and Geelong corridors. There will be more specific announcements about these upgrades soon according to Ford Australia,

• The first variation of the new commercial developed in Australia will be a small pick-up truck. Although Ford wasn't saying, this will probably mark the end of Ford's rebadging of Mazda light commercials that started in the 1970s. For Australians and important European markets, this will ensure this important vehicle range will gain dynamics and levels of refinement missing in recent models.

• When Ford Australia Mr Tom Gorman recently revealed that the long wheelbase Ford Fairlane luxury model was under scrutiny, it now seems that it was not because it was the end of the line as many speculated. Gorman assured CarPoint that any decision to kill the Fairlane was not imminent. If today's announcements generate new LHD export markets for the Australian E8 Falcon range, the Fairlane will become an important component of an export push with a similar role to play as the Holden Statesman, 

• The presence of the President of Ford Asia Pacific and Africa, Mr Peter Daniel at today's announcement and the cordial relationship that clearly existed with Premier Bracks following their meetings in Bangkok bodes well for today's developments. In the past, various incumbents in this position have had a major impact on local operations, not always in Australian interests. Premier Bracks made a point of requesting Peter Daniel to relay a message of thanks to global Ford chief Mr Bill Ford.

• Today's announcement was the first occasion since the late 1980s Capri export program where a Ford Australia President could openly talk again about the potential to export Australian-built Fords. Gorman's comments while guarded provide hope for economies of scale not currently available to the local Ford range: "While we have no concrete plans to announce at this time, our new strategic direction as a company will involve us actively targeting additional opportunities for our outstanding domestically manufactured vehicles."