Hard Focus

It was the great white hope for Ford Australia during a difficult period; build a small car locally and supplement production of the large-car Falcon range and the Territory SUV.

But Ford has now quietly interred the idea, citing projected profitably against a scenario in which most of the car's current 34 competitors are imported from countries with favourable exchange rates and lower labour costs.

"The Global Economic Crisis has brought historic changes to the entire automotive industry. These changed conditions mean we have decided not to continue with our plans to manufacture the Focus in Australia from late 2011," said Ford President, Marin Burela, during a press conference earlier today.

"Although this was a very difficult decision, it is the right decision for Ford Australia. After assessing the market requirements and costs of producing the Focus in Australia -- under these extreme changed conditions -- we concluded we could not profitably manufacture the car here."

Contrary to the expectations of some, Ford's decision has been supported by the Amalgamated Metal Workers Union (AMWU) through vehicle division secretary Ian Jones, who described the announcement as a "$230 million investment of confidence into Australian manufacturing".

"In terms of the Focus, we have said this, both to Marin when he came here -- and we said it to his predecessor -- whilst it was good to have the announcement, in terms of the employment that it was going to generate, even at its maximum export value it was really at the fringe."

"There are no downsides whatsoever," he said, before noting that Burela had "undersold" the reception received from workers earlier in the day when the news was broken to them.

"We were applauded and cheered when we outlined this strategy to our membership this morning."

The decision not to go ahead with Focus production locally leaves a gap in Ford's small-car supply for the Asia/Pacific/Africa region. Currently, the Focus is being built (other than the XR5) at a plant in South Africa, but that plant will drop Focus production in favour of the T6 light commercial vehicle being developed in Australia for global markets. The plan was that Ford Australia would take up the manufacturing slack left by Ford in South Africa ending production of the small car.

Burela was unable to say where the Focus for the region would now be built, but a location in Asia seems most likely.

The decision was made a matter of weeks ago, according to Burela -- and from that, one would assume that Holden's decision to build the Cruze locally had no bearing on Ford's about-turn -- but this is a market with too many competitors in the VFACTS small-car segment as it stands. Despite all the talk of Kuga and Transit Connect built off the same platform on the same production line, it was all looking too difficult.

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