Are we Witnessing the Last Years of Ford Australia?

[whynot]

Originally Posted by Crazy Dazz

But the world has apparently gone mad, and Australia is following as fast as it can.

It is easy to forget that the sole purpose of an automobile manufacturer is to make money for their shareholders. The more money the better. Not necessarily to win car races. Not necessarily to build vehicles we love. Not to support local jobs. Not necessarily to save the planet. Nor to pander to self-appointed “thought leaders”, “futurists”, or whatever self-promoting agenda that is popular this month with the elites.

For example, Toyota Japan reliably generates mountains of free cash (revenue $USD 312B, net income after tax $USD24.3B), with their Australian operations generating $342M after tax. Toyota have continued to develop their ICE technology, have had a solid history on PHEV technology, working on hydrogen, and eschewed EV to a large degree. Yet, according to the elites, thought leaders, et al, Toyota is going down the wrong path to the point that it is risking its financial future. But you cannot argue with the profit Toyota is making.

Love him or hate him or both, a person who is really focused on making money is Mr Musk. His global mission is to vacuum every stray dollar, sterling, euro, yen, and yuan renminbi out of consumers pocket into his own, so he can become Dear Leader of Mars. Musk’s approach to building cars is completely different, focusing entirely on EV technology. It has taken some painful development, but Tesla is starting to generate a nice free cash flow. Doing so against significant headwinds from big financers (who have tried a number of times to short the stock to destruction), unions (look at the shenanigans in Sweden), Marxist green eco-terrorist (sabotaging infrastructure that supplies Tesla plants in Germany), even the Biden Administration’s open hostility (well, that plan worked out great for the DNC). Despite all of this, Tesla has free cash flow and has a portfolio of technology (e.g. batteries, electric motors, AI) finding applications in related fields.

Ford Australia have bet the farm on the 4WD. So far, it has kept them afloat. But when the T6 Ranger was introduced into the Australia market, it was sneeringly panned by motoring journalists, left leaning journalists in general, the elites, etc. Too big. Too Americanised. Too thirsty on fuel, etc, etc. Yet the initial T6 platform has evolved to keep an entire operations going.

Three different car manufacturers making a profit. Three completely different approaches. Three companies who are told time and again that they are building “the wrong vehicle”.

Getting back to your initial concerns about having an EV forced down your throat in the future, I wouldn’t be as worried about that today as I was a few years back. One of the nice things about living in a democracy is that the (often silent) majority gets to have their say in the end. Look at what is happening politically, not only in America, but in Canada, Europe, and even more recently in the UK. Something as definitely snapped in western democracies the last few months, and the progressive elites know it. As people finally see the real hip-pocket price of certain environmental policies, the political support for such policies evaporates.

Are Ford of Australia facing an uncertain future? You bet they are. Look no further than the BYD Shark 6. That said, I am as clueless as anyone else on future market trends. But I do know that open and fair market competition of capitalist societies in Western democracies results in innovation, lower costs, and better products. Such an environment will force Ford (and other manufacturers) to innovate to survive, to the benefit of consumers. All one has to do is to ensure a fair playing field.

Whether our government continue to favour our open market economy or panders to certain hostile geo-political forces is a question that has to be answered before trying to figure out FoA’s future.