Mulally Remarks Raise Concern About Ford Australia’s Future

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North American Int’l Auto Show

More concern about the future of Ford Motor Co. of Australia Ltd.’s engineering and manufacturing operations surface at this week’s North American International Auto Show in Detroit.

The Australian Associated Press (AAP) quotes Ford Motor Co. Alan Mulally as saying the all-Australian Ford Falcon could soon be a thing of the past, as only one large-car platform will be built for all world markets under the company's One Ford strategy.

The Australian newspaper takes the story a step further, reporting Ford’s future as an auto maker in Australia is hanging in the balance, with nothing to replace the Falcon when the current model finishes in five years and no guarantees the plant will get the cash needed to retool.

The report says Mulally, speaking with foreign journalists on the eve of the Detroit show’s first press day, declines to say whether retaining the Australian manufacturing operation, which posted a A$274 million ($253 million) loss last year, is part of the company's long-term strategy.

Later, during a media scrum at the show, Mulally says only that Ford has enjoyed a very good business in Australia. “We believe (the Falcon) is a great car, and there are no changes (planned) right now. In Australia, we’re going to be there with more and more products.”

The Australian quotes Mulally as saying developing a new Falcon just for Australia is no longer an option. “People who make one vehicle for one country – a different vehicle – those days are gone, because you can't compete with the global companies.”

Regardless of where a car is sold, buyers everywhere are looking for the same things, Mulally says. “Around the world now, the things that are driving every purchase decision are quality, fuel efficiency, safety, smart design and the best value.”

Falcon, introduced in 1960, mainstay of Ford's Australian manufacturing operations.

The AAP says the likely successor for an Australian-designed and engineered Falcon is a car based on the American Ford Taurus, which unlike the Falcon is a front-wheel drive. The earlier-generation Taurus was imported to Australia in the late-1990s with little success.

The Falcon, introduced in 1960, is a mainstay of Ford's Australian manufacturing operations. It was the 5th best-selling car in Australia in 2009, with 31,023 sales compared with 44,387 units for GM Holden Ltd.’s top-selling Commodore large car.

Ford Australia employs about 4,700 people at its plants in the state of Victoria, including 2,300 factory workers. There is an additional 2,400 employees in areas such as engineering, administration, marketing and product design.

Mulally does not say in the AAP story whether Ford Australia will play a leading role in developing the large-car platform, or whether a local version of the global car would be built in Australia. But he does say there is no chance a decision to forego building the next Focus in Australia beginning in 2011 will be reversed.

Ford Australia President and CEO Marin Burela tells the Fairfax Media Ltd. newspaper chain he hopes Australian engineering talent will be used for the One Ford project. He says a decision on whether the world car will be front-wheel or rear-wheel drive is at least a year away.

“The all-new Falcon doesn't have to come into play until the end of 2014, early 2015, and we don't have to make a decision until 2011 on what that vehicle will be, in terms of styling, technologies,” Burela says.

Ford Australia's Broadmeadows plant outside Melbourne would need to be extensively retooled to make the car, but The Australian says Burela declines to say whether Detroit would fund the overhaul.

It reports Burela as saying Ford Australia now is examining other options to large cars in an effort to keep its Melbourne factory open.

“We're looking at a variety of things at the moment,” he says. “What we build in Australia will evolve over the next 18 months to two years.”