Revealed Ford secret ute plan to save factory

Carsguide ·

15 January 2013

Revealed Ford secret ute plan to save factory

Ford Australia studied a radical plan to replace the Falcon on the Broadmeadows production line with a heavy duty pick-up – now the third biggest market locally behind small cars and SUVs, and Ford’s biggest seller last year.

But the proposal to make the Ranger utility in Australia rather than import it from Thailand was shelved at the eleventh hour as the strong Australian currency made its export potential unviable.

The revelation comes as the output of Ford’s Broadmeadows factory – which makes the Falcon sedan and ute and the Territory SUV – fell to historical lows in an all-time record year for new-car sales in 2012.

A top-level automotive industry analyst in Detroit told News Limited overnight that Ford Australia went “a long way down the road” with plans to replace the Falcon and Territory with the Ranger pick-up and its as-yet unreleased seven-seater 4WD wagon equivalent.

Instead, the Ranger is imported from Thailand with a zero tariff because of the Free Trade Agreement with that country, even though the vehicle was designed, developed and engineered in Australia.

“It would have made perfect sense to build Ranger there (in Broadmeadows),” said former Detroit auto executive Jim Hall, now an expert analyst who contracts to the industry. “Especially when you consider how big the market is for that vehicle locally, and it’s export potential. And, believe me, Ford Australia came very close.”

Because of Australia’s Free Trade Agreement with North America, the Ranger could be exported there without the hefty 25 per cent tariff on imported pick-ups to protect US manufacturers. Pick-ups outsell cars in North America.

But, Hall says, the strong Australian dollar and a change in US legislation on fuel economy standards – which favoured improvements to the larger, US-made Ford F-Series pick-up rather than introducing the more economical Ranger – nixed plans to build the Ranger in Australia.

“It’s a classic example of legislation intended to do one thing but has unforeseen results,” Hall said. Conservative estimates forecast Ford Australia could sell up to 50,000 Ranger utes and SUVs locally – the Ranger outsold the Falcon and Territory last year as a ute alone. Broadmeadows built 37,000 vehicles last year, its lowest annual output since it opened in 1960.

Instead, Ford makes the Ranger in Thailand, South Africa and Argentina. The vehicle is sold in 180 countries – more than have McDonald’s stores – but not North America. Ford executives would not comment on the axed Ranger production plans for Australia.

But the CEO of Ford globally, Alan Mulally, told News Limited at the Detroit motor show overnight “we will continue to evaluate” the future of Broadmeadows’ manufacturing operations. “We’ve got good operations in Australia, we continue to invest in our products … but we will continue to evaluate that going forward,” Mulally said.

Ford has so far committed to Australian manufacturing until the end of 2016 and plans to introduce an updated Falcon in 2014. But the outlook remains bleak if sales don’t recover.

Ford’s global marketing chief Jim Farley told News Limited at the Detroit show overnight: “The segmentation [of the large-car market] has been disappointing but it’s the reality. Customers have been voting with their pocketbooks.

“Certainly [Australia] is a challenge. We believe in the Falcon, we believe in the Territory, we believe in Broadmeadows. [But] beyond 2016 is another step.”

At the Los Angeles Motor Show late last year Ford’s newly appointed chief operating officer Mark Field told News Limited that a decision to close Broadmeadows has not been made.

“We’ve made the investments in Broadmeadows that take us to 2016, and we’re in the process of looking at our plans and understanding what we can do going forward,” Fields said. “Beyond 2016, in the next couple of years we’ve got to make those decisions because of the [manufacturing] lead times.”

Analyst Hall says he believes Ford headquarters in Detroit is yet to decide the fate or future of Broadmeadows.

“It’s my understanding a decision has not been made,” Hall said. “No matter what happens, I’m convinced Ford will keep their engineering and design facilities in Australia. It’s too important for the region, plus they contribute great expertise to Ford globally.”

This reporter is on Twitter: @JoshuaDowling

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Published 15 January 2013