Ford Australia to Slow Plant Production as Falcon Sales Falter

Ford Australia is closing both its car- and engine-making operations for a week in July after sales of its locally made Falcon large car plunged 24% in May.

The 7-day closure of the Broadmeadows car plant and Geelong engine factory will affect 1,800 workers.

The auto maker, which in May announced a A$290 million ($289 million) annual loss in its last financial year, has not ruled out job cuts. Some 240 jobs were eliminated last year.

Company spokeswoman Sinead Phipps tells The Age newspaper in Melbourne Ford is adjusting to market conditions. “We remain committed to our strategy of matching production to market demand,” she says.

‘‘We have also confirmed that we are looking at a number of alternatives to allow us to manage our production schedule through the rest of this year, including additional down days or the possibility of a down balance (to build less vehicles per day).”

Ford Australia received more than A$100 million ($99.7 million) from the federal and Victoria state governments earlier this year to help the auto maker keep its Australian production operations running until at least 2016.

However, media reports say the continuing decline in Falcon sales is threatening the survival of the engine facility, which produces the inline 6-cyl. engine for both the Falcon and Territory SUV ranges.

Additionally, the Geelong plant is competing with an imported Ford turbodiesel engine for the Territory and a turbo 4-cyl. for the Falcon.

The production slowdown plans come just days after Ford Performance Vehicles, formed in 2002 as a joint venture between Ford and U.K.-based Prodrive, terminated 15 staff members including General Manager Rod Barrett.

Australian newspapers are speculating there will be a total FPV shutdown at the end of the year because of its falling demand for the high-performance Falcon cars. FPV claims 80 dealerships throughout Australia and New Zealand.

“This has been a very difficult business decision and one we've taken with great regret,” Prodrive Asia/Pacific Managing Director Bryan Mears, who took over from Barrett, says in a prepared statement quoted by Melbourne’s Herald Sun newspaper.

“Unfortunately, today's business realities are that we have to manage our business appropriately, and that includes making the FPV business the right size for the market and taking advantage of better synergies with Ford and Prodrive.”

In more bad news for the Blue Oval’s image, Ford Australia’s monument to its history Down Under is itself about to become history with the closure of the Ford Discovery Center in Victoria on July 29.

The complex opened in April 1999 with Henry Ford III, the great-great grandson of the founder of Ford Motor in the U.S. as its patron.

During its 13 years of operation, the center has attracted more than 250,000 visitors. But the trustees say in a statement that a recent review, combined with ever-changing needs in the museum industry, shows the center cannot continue to evolve and expand in its current form.

“Both partners in the Ford Discovery Heritage Trust (Ford Australia and Deakin University) will now look for alternative ways in which to continue highlighting our joint history of cutting-edge engineering, design and manufacturing,” the statement says.

Directors will work closely with staff, volunteers and enthusiasts to manage a strategic and orderly wind-down of operations and the return of loaned exhibits and vehicles.

The center describes itself as Australia’s leading interactive automotive museum, which has chronicled Ford Australia since its early beginnings in Geelong in 1925. It is located adjacent to the original Ford manufacturing operations site.

The museum was the focal point for Ford Australia’s 75th anniversary celebrations and the Ford centenary celebration in 2001. Exhibits include a ’34 Ford Ute Coupe acknowledged as the world’s first car-derived utility vehicle or pickup.