Ford boss confident in local car market

[DanielXR8]

Ford boss confident in local car market
November 16, 2006 - 5:29PM

Ford Australia president Tom Gorman says he's optimistic about the future of local car manufacturing despite job cuts, falling sales, high petrol prices and rising interest rates.

And Mr Gorman has hit back at critics of the financial support vehicle producers get from the government, set to reach $7 billion over the next 10 years, saying Australia gets a big bang for its buck.

"If you look at the automotive industry anywhere in the world, the industry is in partnership with the local government," the Ford boss told reporters in Adelaide.

"The reason is that we're such major contributors to society.

"Not only are we huge contributors to the economic vitality of the countries that we build our products in but we're also a big part of the cultural vitality.

"The Ford Motor Company has been in Australia for over 80 years so we are much more than just an employer - we are part of the fabric of society and the government has recognised that.

"The government has recognised how important we are and I think they get a very, very good return for their investment."

Mr Gorman said while he couldn't comment specifically on Ford's rivals, he believed there was room for four car manufacturers in Australia and he remained upbeat about the long-term future.

"Each one of us has a slightly different business model," he said.

"If you look at the four manufacturers today, each one of us has our own strengths and weaknesses.

"So I wouldn't be in the industry if I wasn't optimistic about it.

"Although I speak with a funny accent, my heart and soul is here at Ford Australia," said Mr Gorman, an American.

"If you think back to what we announced in May, we announced that over the next decade Ford was going to invest $1.8 billion in this country.

"We wouldn't have announced that if we weren't optimistic about the future."

Mr Gorman's positive attitude comes in contrast to some recent movements in the vehicle sector.

While sales remain strong overall, car producers and component makers have been forced to cut staff with the shift in demand to smaller, imported vehicles because of higher petrol prices.

In response both Ford and Holden recently cut assembly line jobs, Ford losing 600 workers at its Falcon production facility in Victoria and Holden 200 at its Melbourne engine plant.

Last year Holden also axed its third shift in Adelaide at its Elizabeth assembly operations and Mitsubishi closed its engine production plant and reduced staff at its Tonsley Park assembly facility.

A number of component producers have slashed jobs, with some going to the wall as car companies look to cut costs by sourcing some parts from overseas.

Mr Gorman said for suppliers to be successful in Australia they had to find ways to be more efficient.

"I don't see the end of the supply base here in Australia," he said.

"I see it having to be smarter, having to drive inefficiency out of its system and in some ways they have to bulk up, and you're seeing that with some mergers in the industry.

"So I believe there are multiple paths to success. It isn't just roll over and play dead."