Ford and Holden have new future

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 brighter aspect is thanks to cash and commitments from Canberra and Detroit.

Ford has just won a $103 million lifeline that locks the Falcon and Territory in place until at least 2016, while Holden is closing fast on a deal to cement its manufacturing operation in South Australia through until 2020.

Both companies now join Toyota Australia, which has just switched its Altona factory to an all-new Camry and is spending $350 million on a fresh engine factory, with solid commitments from their head offices to ongoing operations in Australia.

The new deals come after high-level meetings in Detroit yesterday between the Federal Minister for Industry, Senator Kim Carr, and South Australian premier Jay Weatherill and a range of senior motown executives up to Ford Motor Company's CEO Alan Mullaly and the chairman of General Motors, Dan Akerson.

The major focus is development of a fresh co-investment strategy between the Federal government and the carmakers, taking advantage of the $3.4 billion fighting fund included in the Automotive Transformation Scheme as part of the motor industry plan that runs through to the end of the decade.

Senator Carr was upbeat when he emerged from the talks, firstly to pledge his support of Holden and then to announce the new Ford deal which has been fast-tracked in less than six months.

"We had very, very productive conversations. We are at the table," said Senator Carr.

He confirmed the Ford deal protects the jobs of the company's production line workers at both Broadmeadows and Geelong, despite dismal Falcon sales in 2011 and total output which was down to only 45,000 vehicles including the Territory SUV and Falcon ute.

Senator Carr also said his priority for Holden was ensuring no job losses at either Fishermans Bend, the heart of Holden's engineering and design operation, or at the factory in Adelaide that produces the Commodore and compact Cruze.

"We are in the business of fighting for jobs. That's what this is all about. Fighting for Australian jobs and fighting for partnerships that take us through the rest of this decade," Senator Carr said.

"Manufacturing facilities in Victoria are very, very important."

Senator Carr said the new deals will also protect smaller companies that supply components to the major makers, as well as drawing new investment from offshore suppliers - citing successes in India and China - keen to service Ford and Holden.

The Ford deal is signed and sealed, while everything points to a Holden contract within six months.

"I think we've reached a position where an agreement looks likely," said Premier Weatherill.

Holden is already committed to the upcoming VF Commodore in 2014 and its compact Cruze through to at least 2016, but the new deal is aimed at locking the company into GM's future global product plans as it eliminates 'orphans' such as the Australia-only Commodore.

"Am I confident there is a way forward for Holden? Yes, I'm confident," said the chairman of GM Holden, Mike Devereux.

"We are working on a long-term sustainable future for this company. We're talking about things that won't become true until late 2016."

For Ford Australia, the fresh investment and high-level support from Ford in Detroit is intended to end uncertainty over the future of the Falcon and the sort of rumours, loss of confidence and falling sales that eventually forced Mitsubishi to shut its Australian factory.

"There is no way to make this story bad," said the head of Ford Asia- Pacific, Joe Hinrichs.

Senator Carr, who was recently demoted to the outer cabinet of Julia Gillard's government, was bullish and enthusiastic about his work on an industry that has become a personal passion.

"A $103 million investment is a very significant amount. I'm very, very pleased about this announcement," said Carr on the Ford front.

But he also knows the reality of the increasing globalisation of the motor industry, and the pressures placed on the three local makers by a strong Australian dollar which has effectively made exports - even for Toyota - a non-profit operation.

"We have to ackknoledge harsh realities," Senator Carr said.

"Our approach is about building and maintaining capability in Australia. We are in the business of fighting for jobs. That's what this is all about. Fighting for Australian jobs and fighting for partnerships that take us through the rest of this decade.

"It's strategically vital. The loss of the industry is irretrievable. It will cost a lot more, a lot more, if we don't have an automotive industry in Australia."