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Ford and Holden news a relief

  • By Paul Gover
  • Carsguide
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    Australia is one of only 13 countries in the world that are capable of doing everything in carmaking Photo Gallery

Whew. That was the reaction from a lot of people.

The Koreans starred, the Japanese mounted a comeback, and One Ford hit the headlines with an extended family of Focus-based newcomers that it is certain to make a big hit in Australia.

But it was one car and the commitment of its company chief that made the most impact as America fought back on the opening day of the 2011 North American International Motor Show.

The positive results in Detroit yesterday for Ford and Holden came as a relief to a lot of us.

It looks like Australia has ducked a potential disaster on the globalisation front, avoiding the inevitable cull that's coming as major carmakers rationalise the number of orphan products they serve up to customers around the world.

The Ford Falcon and Holden Commodore are unique to Australia, would never be approved from scratch under today's Detroit management, and are built at factories which are not even close to the break-even numbers for output in the rest of the world.

But they still make sense for a lot of Australians - despite a steady sales decline in recent years - and they turn a profit for their companies.

Now, thanks to intelligent business plans by the brands and the commitment of Kim Carr - recently demoted in the Gillard government but still a firebrand who genuine 'gets' the car industry - with a bag of Canberra cash, they will live until at least 2016 and possibly a lot longer. At least in the case of the Commodore.

By international standards the $103 million awarded to Ford is not a lot of money, but it's enough to push the Falcon and Territory through a major makeover that will keep them alive until 2016. A similar deal, or something better, is now a foregone conclusion for Holden.

And that's great news for anyone who supports Australian manufacturing and thinks the country needs to be more than just a giant strip mine. 

It might not be a popular position, and lots of people question the amount of support given to carmaking, but Carr points out that even mining and agriculture get some form of financial support from the Federal government.

Apart from the various factories in Melbourne and Adelaide, there are many smaller component companies who will celebrate the good news for Ford and Holden, and lots of engineers who do other work for their global bosses who will still have the local foundation needed to ensure they have a job in the future.

Australia is one of only 13 countries in the world that are capable of doing everything in carmaking , from the first design sketches through to final assembly. Losing that capability, or even a serious threat to that capability, would have been a disaster.

There has been a lot of gloom and a lot of uncertainty about Ford and the Falcon in recent months, but just as the weather at this year's Detroit auto show has been as unseasonably warm, so the clouds over Broadmeadows have cleared.

Yesterday was easily the best day in the recent history of the Australian motor industry and one that will go down in the history books as a turning point. Thankfully, things have turned the right way for Ford and Holden, and also for Australia.

Comments on this story

Displaying 3 of 6 comments

  • The future holds only 1 car company. All car racing will be like NASCAR.Why follow the American model or even go to Detroit. This car industry is over America they don’t like doing tough and they love the idea that someone else doing the hard work. IE OUTSOURCE.
    What a joke, everyone crying poor mouth!! How does Kia car company do it ? Maybe learn from them !

    Bobby of Parramatta Posted on 12 January 2012 9:17am
  • If Australia lost Holden and Ford our unemployment rate would probably sour to double digits by way of the ancillary businesses that prosper because of components, research and development. Public transport, hospitals and schools also run at a loss to support other important factions of society so we have to accept that now we no longer have tariff protection against 3rd world countries who have labour rates at 10% of ours that we need the governments to co-invest with industry in key areas.

    Max W. of Aldinga Beach SA Posted on 11 January 2012 10:59pm
  • And another handout to the poor starving Ford and GM top brass. The Falcon and Commodore were always going to be built in Australia until 2016. But, after that it’s anyone’s guess.  We’re most unlikely to see an all new Asutralian built and esigned Falcon post 2016, with the Taurus probably rebadged and renamed given the history in Australia of the Taurus name. And, as for the Commodore, there was only news a couple of months back that GM would not commit the Australian designers team to post 2016.  So what do we have.  A large grant of Australian taxpayers money to two US companies, and no guarantees for the longevity of the jobs of the Australian car-building workforce.

    Mike O'Connor of Canberra Posted on 11 January 2012 8:44pm
  • I cannot see why every Australian has to subsidise Holden and Ford. A tarriff on imported cars was the only way to go, it worked before, why have we changed it. Globalisation particularly in the car industry will not work. We cannot compete with cheap overseas labour. The subsidies are only delaying the inevitable downfall of Holden and ford manufactoring in Australia.

    richard ingleson of perth western australia Posted on 11 January 2012 8:31pm
  • Aren’t we just prolonging the obvious? Just let them go…..

    Andrew Posted on 11 January 2012 7:04pm
  • Some people whinge about the $34million from the federal government, but then the government gets money back through various company and personal taxes, as well as less money paid out through unemployment benefits. If someone has fairly accurate numbers, I’d be interested in seeing them.

    MattW of Newcastle Posted on 11 January 2012 6:15pm
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