Ford to shed 240 local jobs, cut production as demand slumps - Page 6

**Fordman1** · 15-04-2011, 05:06 PM

I think the writing was on the wall when FG Falcon was released (early 2008), unfortunately it was around about the time of the GFC , but Ford launched FG sedan at much lower daily rates than the business plan target.

Roll forward to 2011, a normal product cycle would see a product selling a bit lower than the period just after launch 3 years later, but the product should be now be a cash cow.

Well ...... the sales are NOT at that level, they are a LOT lower.

Looking at what Ford are predicting to build daily after their restrurture (209 per day on ALL locally made product), how on earth can they justify a new local product ?

The volumes need to increase -- a lot !

Road_Warrior · 15-04-2011, 05:23 PM

Here's the Carpoint assessment which as always is in-depth:

http://www.carpoint.com.au/news/2011...e-by-240-24486

Quote:

Ford Australia will offer 240 production line workers voluntary redundancy packages, to take effect from July.

The decision was made as a consequence of the manufacturer grappling with a volatile market over the past two years.

In conversation with the Carsales Network this morning, Ford's Public Affairs Director, Sinead McAlary laid out the rationale for the restructure.

"We've been running a number of 'down days' for the last couple of months," she explained. "That's obviously not a sustainable way to run the business, on-going. A number of our competitors have been doing it as well and the supply base has been screaming out to us for some more schedule stability.

"In the last couple of months last year and the first couple of months this year, we've examined where the market was going and decided it was better to realign our production with market demand -- and to do that in a structural way rather than continue running too many down days.

"So we'll be reducing production from the middle of July -- from 260 vehicles per day down to 209 vehicles per day. We'll be back to working five days a week at that point, but we'll obviously have lower output each day. It will stop the need for down days."

Ford will manage the human resource issue like a game of Kerplunk, pulling out a few straws here and there without the whole production process falling in a heap. 240 staff represent a significant proportion of Ford's 1800 manufacturing staff (out of 3400 in total), but the company is confident the redundancy and redeployment program can be carried out without any side effect other than a slower line speed.

"Our manufacturing director would probably hate to simplify it to this degree," McAlary continued, "but basically what we do... is slow everything down. At every station we have to rebalance the entire manufacturing footprint. In engine build, for example, we make less engines, obviously -- since we're making less cars. On the manufacturing line, in Broadmeadows, it's more a slowing down of the process. The cars take longer to go through each station, so people have more time to do what's required for each car. Therefore you need [fewer] people."

McAlary believes the restructuring will be felt more in the Campbellfield facility than in Geelong.

"There will be an impact across both sites; we haven't yet determined whether it will be a 50/50 split. At this point it's looking like Geelong... may be slightly less affected than Broadmeadows, because there's more opportunity in Geelong to redeploy people.

"Out at the casting plant, [with the] contract we have, we can actually move people from engine or stamping into the casting side of the business, if they chose to.

"Geelong gives -- this is a high-level view -- potentially more opportunities for redeployment, but that's another reason why we've come out and announced it ahead of time. Now we need to spend the next three months planning for it. We can actually work with our employees and the unions on 'where are the redeployment opportunities?' -- and where there's [none], our intent will be to offer voluntary redundancy packages.

The timing of the announcement comes barely a week after the company's high-profile launch of the new SZ Territory, which is yet to go on sale. Would McAlary have preferred to announce the restructure after the new SUV was already on sale?

"Particularly on the employee front, there's never a good time to announce anything that has a negative impact on the employees, but we've had to take into account where the Territory launch process is... and also the other launches we have coming up... throughout the year," she said.

"The announcement, the week after we did the media launch for Territory -- you could debate whether that's a good time or not, but we haven't actually gone on sale with Territory yet, so that's not the be-all and end-all of picking the right time to announce [staff reductions]."

Ford is due to announce its 2010 financial results within a matter of weeks -- and that may be yet another factor in the timing of the restructuring announcement. McAlary wouldn't be drawn on the question of profit or loss for 2010, but former Ford Australia President Marin Burela had intimated at AIMS in Sydney last year that the company was likely to post a profit for 2010.

Since the staff reductions in July and the Falcon sales slump for the first quarter of 2011 won't impact on last year's balance sheet, it might be inferred that Ford will remain on track to announce a profitable 2010. Furthermore, the changes to staffing levels in July may be the difference between profit and loss for the company in 2011.

Looking forward, McAlary suggested that Ford's product development initiatives (EcoLPi and EcoBoost Falcon) might well "arrest the decline of the large car segment" and, in the event that the two alternative-energy drivetrain variants prove a hit in the marketplace, Ford could ramp up production once more.

Production balance has been something of a problem for Ford over the past few years, according to McAlary.

"We reduced production in late 2008, but then -- through the last couple of months of 2009 and the first half of 2010 -- we were working overtime. We didn't actually increase our line speed, but we were working every second Saturday for more than six months.

"It's all about matching production to demand, so if demand goes down, you have to match production -- but when [demand] goes back up, you also have to match production."

The closure of Ford Credit had an unintended consequence in contributing to the drastic supply-and-demand fluctuations that have challenged Ford's manufacturing facilities since.

"One of the reasons we were working overtime, back in 2010 was because of the economy coming out of the Global Financial Crisis -- and our dealers were starting to come out of the issues that they had with wholesale financing..." said McAlary.

"So throughout 2009, a lot of our dealers had really de-stocked, to what was an unsustainable level -- once the economy started to come back up. They were clamouring for more cars; that's why... one of the reasons we were working overtime back then was to re-stock Ford dealerships around Australia."

In the past, Ford Australia has run into the red and they really didn't seem to care. Now, its seems they are pulling out every trick in the book to stay in the black. Could it be that Dearborn has made profitability the number one issue deciding FoA's future?

jpd80 · 15-04-2011, 05:25 PM

Quote:

Originally Posted by Barraxr8

I think the writing was on the wall when FG Falcon was released (early 2008), unfortunately it was around about the time of the GFC , but Ford launched FG sedan at much lower daily rates than the business plan target.

Roll forward to 2011, a normal product cycle would see a product selling a bit lower than the period just after launch 3 years later, but the product should be now be a cash cow.

Well ...... the sales are NOT at that level, they are a LOT lower.

Looking at what Ford are predicting to build daily after their restrurture (209 per day on ALL locally made product), how on earth can they justify a new local product ?

The volumes need to increase -- a lot !

I would like to see them get the FAPA contract for supply of Mondeo/Fusion,
That car locally produced in sedan, 5-door and S/W in diesel and Ecoboost would fly.

**Fordman1** · 15-04-2011, 05:26 PM

Quote:

Originally Posted by jpd80

I would like to see them get the FAPA contract for supply of Mondeo/Fusion,
That car locally produced in sedan, 5-door and S/W in diesel and Ecoboost would fly.

YES !!!

And an SUV "Top-hat" version too please

jpd80 · 15-04-2011, 05:29 PM

Quote:

Originally Posted by Barraxr8

YES !!!

And an SUV "Top-hat" version too please

That would be the Ford Edge replacement, it's like CX-7 with the Terry's wheelbase.

It's the image changer that Ford Australia needs, a super efficient car that is less
expensive than Falcon but offering all of the latest technology and luxury levels.

stevz · 15-04-2011, 05:32 PM

Just on the topic of the steel being auctioned, I notice there is a lot of 'Hot rolled high strength steel.' Now correct me if I'm wrong, but wasn't the use of high strength steel introduced with the FG, hence the stonger structure / better safety rating?

**Fordman1** · 15-04-2011, 05:33 PM

Quote:

Originally Posted by jpd80

That would be the Ford Edge replacement, it's like CX-7 with the Terry's wheelbase.

It's the image changer that Ford Australia needs, a super efficient car that is less
expensive than Falcon but offering all of the latest technology and luxury levels.

Also the latest Powertrain options from global connections !!

Including Hybrid, EcoBoost, and Electric options. (some of these for the Greenies

and the Government

).

Lets hope so ......

**Fordman1** · 15-04-2011, 05:34 PM

Quote:

Originally Posted by stevz

Just on the topic of the steel being auctioned, I notice there is a lot of 'Hot rolled high strength steel.' Now correct me if I'm wrong, but wasn't the use of high strength steel introduced with the FG, hence the stonger structure / better safety rating?

Hot Rolled High strength steel has been around for ages, Boron based high strength steels are new in FG.

Jesmol · 15-04-2011, 05:37 PM

Quote:

Originally Posted by Barraxr8

Hot Rolled High strength steel has been around for ages, Boron based high strength steels are new in FG.

This High Strength HR steel is usually the normal steel used in a car these day, with Ultra Hi Tensile being used in other more critical parts.

stevz · 15-04-2011, 05:38 PM

Quote:

Originally Posted by Barraxr8

Hot Rolled High strength steel has been around for ages, Boron based high strength steels are new in FG.

Quote:

Originally Posted by Jesmol

This High Strength HR steel is usually the normal steel used in a car these day, with Ultra Hi Tensile being used in other more critical parts.

Thanks for clearing that up.

jpd80 · 15-04-2011, 05:39 PM

Quote:

Originally Posted by Barraxr8

Also the latest Powertrain options from global connections !!

Including Hybrid, EcoBoost, and Electric options. (some of these for the Greenies

and the Government

).

Lets hope so ......

CD4 Fusion/Mondeo/Edge was always the combination FoA was looking at.
Plenty poo pooed the idea but a slick AWD V6, Ecoboost I-4, diesel or hybrid
might just be the ticket to FoA's salvation especially if the costs are right.

Taurus was never really considered, it's big like Fairlane but with less room.

**Fordman1** · 15-04-2011, 05:40 PM

Quote:

Originally Posted by Jesmol

This High Strength HR steel is usually the normal steel used in a car these day, with Ultra Hi Tensile being used in other more critical parts.

^^^^^^^^^^ This.

Yes I agree.

**Fordman1** · 15-04-2011, 05:42 PM

Quote:

Originally Posted by jpd80

CD4 Fusion/Mondeo/Edge was always the combination FoA was looking at.
Plenty poo pooed the idea but a slick AWD V6, Ecoboost I-4, diesel or hybrid
might just be the ticket to FoA's salvation especially if the costs are right.

Taurus was never really considered, it's big like Fairlane but with less room.

I've just driven the latest Mondeo Diesel... lovely car.

Roll forward to the next generation.... I imagine it'll be WOW !

Road_Warrior · 15-04-2011, 05:44 PM

Quote:

Originally Posted by jpd80

CD4 Fusion/Mondeo/Edge was always the combination FoA was looking at.
Plenty poo pooed the idea but a slick AWD V6, Ecoboost I-4, diesel or hybrid
might just be the ticket to FoA's salvation especially if the costs are right.

And the consolation prize is, drum roll....

jpd80 · 15-04-2011, 05:44 PM

Quote:

Originally Posted by Barraxr8

^^^^^^^^^^ This.

Yes I agree.

The nano steel technology coming in a few years is hot formed and promises
the same strength but with the lightness of Aluminium panels without the
added expense and complexity.

**Fordman1** · 15-04-2011, 05:46 PM

Quote:

Originally Posted by Road_Warrior

And the consolation prize is, drum roll....

Not good ?

Road_Warrior · 15-04-2011, 05:49 PM

Quote:

Originally Posted by Barraxr8

Not good ?

How do you like your Mustang, two doors or four?

**Fordman1** · 15-04-2011, 05:52 PM

Quote:

Originally Posted by Road_Warrior

How do you like your Mustang, two doors or four?

Mmmmm... probably 4.

......but would it sell ?

Australia has spoken with it's "wallet".

jpd80 · 15-04-2011, 05:55 PM

Maybe it's best for Ford to do something different to challenging Commodore,
if fuel prices keep climbing for the next few years, Holden may have to recant
and disappoint a lot of their fans while Ford has already transplanted theirs
to newer more efficient vehicles that still go hard.....

Road_Warrior · 15-04-2011, 05:59 PM

Quote:

Originally Posted by Barraxr8

Mmmmm... probably 4.

......but would it sell ?

Australia has spoken with it's "wallet".

Think of it as assuming the role of FPV cars, XR8 and XR6 Turbo, only performance buyers will go for it. So volumes aren't really going to matter as much provided that the donor platform has been designed for LHD/RHD right from the beginning.

And Mullaly did say that time ago that "we will have a RWD vehicle and it will be available around the world"

**Fordman1** · 15-04-2011, 06:00 PM

Quote:

Originally Posted by jpd80

Maybe it's best for Ford to do something different to challenging Commodore,
if fuel prices keep climbing for the next few years, Holden may have to recant
and disappoint a lot of their fans while Ford has already transplanted theirs
to newer more efficient vehicles that still go hard.....

Yes I agree, a product for the masses, with the latest global Tech' and options :

Quality, Modern, Great looking, efficient, and appealling to all car buyers :

Performance.

Greenie

Fleet

Family

This is where Ford Started ......

**Fordman1** · 15-04-2011, 06:01 PM

Quote:

Originally Posted by Road_Warrior

Think of it as assuming the role of FPV cars, XR8 and XR6 Turbo, only performance buyers will go for it. So volumes aren't really going to matter as much provided that the donor platform has been designed for LHD/RHD right from the beginning.

And Mullaly did say that time ago that "we will have a RWD vehicle and it will be available around the world"

2 door Mustang I'd say.

Road_Warrior · 15-04-2011, 06:08 PM

Quote:

Originally Posted by Barraxr8

2 door Mustang I'd say.

Yes but but, a person with (supposedly) inside knowledge who inhabits certain US-based forums from time to time has said twice now that there is a 4 door. I won't name the person or the forums but JPD80 will know who I am on about.

He's been pretty close to the mark with info before as well.

**Fordman1** · 15-04-2011, 06:15 PM

Quote:

Originally Posted by Road_Warrior

Yes but but, a person with (supposedly) inside knowledge who inhabits certain US-based forums from time to time has said twice now that there is a 4 door. I won't name the person or the forums but JPD80 will know who I am on about.

He's been pretty close to the mark with info before as well.

Well lets hope so !!

And lets hope the recently announced downbalance does not change that possibility.

HOWEVER .....

Is that the future ?

Come 2020 will we see this thread again if the above comes to fruition ?

FoA REALLY need the best tech' and economy for locally produced cars, moving forward (as the "Ranga" would say

)

Would that car appeal to all buyer demographics ?

Would it fill the assembly plant here with 120,000 vehicles per annum ?

Road_Warrior · 15-04-2011, 06:20 PM

No this car would be imported, not made here.

This is the 'consolation prize' I was talking about for losing our RWD performance Fords. The rest of it would be CD4 cars made here.

**Fordman1** · 15-04-2011, 06:25 PM

Quote:

Originally Posted by Road_Warrior

No this car would be imported, not made here.

This is the 'consolation prize' I was talking about for losing our RWD performance Fords. The rest of it would be CD4 cars made here.

That sounds plausible...

Well it would be a solution for local manufacturing...

FoA your turn .... now come up with a business plan that works !!

jpd80 · 15-04-2011, 06:32 PM

Quote:

Originally Posted by Barraxr8

That sounds plausible...

Well it would be a solution for local manufacturing...

FoA your turn .... now come up with a business plan that works !!

Thought was given to:
Locally manufactured CD4 FWD/AWD Sedan and SUV for FoA
Imported RHD Mustang and 4-door coupe for FPV....

If Ford had nuts they'd go sue a couple of toe rags for destroying
Falcon's market with constant innuendo and unfounded rumors.
Don't go quietly into the night like Bits-a-missin'

**Fordman1** · 15-04-2011, 06:36 PM

Quote:

Originally Posted by jpd80

Thought was given to:
Locally manufactured CD4 FWD/AWD Sedan and SUV for FoA
Imported RHD Mustang and 4-door coupe for FPV....

If Ford had nuts they'd go sue a couple of toe rags for destroying
Falcon's market with constant innuendo and unfounded rumors.

Yes...

This plan would give FoA great possibilities.

'Drive' journalists need a good punch in the face....

But so do some people at Ford.

gtfpv · 15-04-2011, 06:44 PM

the 1st thing that comes to mind with me , is typical greedy economic company . they could afford to carry the excess labour for a while , and shed maybe BS JOBS. but no lets save some admin arrrce and shares and chop our labour , then what next , continue lesser /smaller business , or fingd they are under resourced and underskilled come time for new projects and plant upkeep . typical uni degree economics on how to send a company and country down the gurgler . its amazing how dumb our top people have become . useless would be the word .

Swedishmoose · 15-04-2011, 06:50 PM

Hi...

too many idiotic decisions, FoMoCo's one Ford policy, The Mondeo as a main competitor, no available Diesel for the Falcon, scrapped Falcon Station Wagon, no export markets (except NZ), high Aussie Dollar, free trade with the US and some Asian nations, changing consumer taste, dying crowd of enthusiasts for big classic RWD sedan .....and the list goes on and on and on...

I don't see a future for the Falcon, the Territory and a Ford production in Australia.

Too many wrong decisions and if there were a fewgood ones, they came toooooooo late.

An excellent Falcon FG and Territory (exceptional value for money), one of the best engines ever made in Australia (turbocharged Barra) and a genuine good product messed up by decisions of people who are overpaid and don't give a s*** about Broadmeadows, Geelong , the Falcon and the Territory.

If they can make more money by axing Falcon, Territory and FoA.......they will do it. Thats the sad part.

And now i hope i am wrong and they get their act together.

The Moose