2016 End of an Era Commodore vs Falcon

 
  cootanee Chief Commissioner

Location: North of the border!
Is this is really the beginning of the end of vehicle manufacturing in the country?

Unfortunately Ford has been struggling for some time. Where did all my subsidies go?  What did ford spend them on?

An unfortunate circumstance for all concerned.  I hope the company spends time with their workers and can assist them in finding new roles in the workplace.

Regards
Brian
bevans

Those subsidies mostly went into capital works upgrading plants. However you still have to build and sell the thing.

You only need to look where most cars are now being made compared with a decade ago. Brazil, Mexico, Thailand, China, India, Spain, Czech Republic building US/Japanese/Korean cars.

Fact is manufacturing is now a very low % contributor to GDP - a steady decline over four decades.

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  fabricator Chief Commissioner

Location: Gawler
Those subsidies mostly went into capital works upgrading plants. However you still have to build and sell the thing.

You only need to look where most cars are now being made compared with a decade ago. Brazil, Mexico, Thailand, China, India, Spain, Czech Republic building US/Japanese/Korean cars.

Fact is manufacturing is now a very low % contributor to GDP - a steady decline over four decades.
cootanee
Problem is if we buy almost all our manufactured goods from overseas, then we are exporting money. Worse still we let overseas so call investors buy up vital companies (food, electricity, mining etc), when then compounds the problem when they export the company profits. The real problem is policy from both major parties, investors can be a bad thing, look at Newcastle's rail line for example.

As for Ford (and Holden), they brought this on themselves. For the money being charged for these Australian made bog standard cars, you can buy a luxury car from Europe, not to mention people just aren't buying the sort of cars ford and holden make.
  cootanee Chief Commissioner

Location: North of the border!
There are no simple answers. It's no doubt the high Aussie $ (or is that low US$) has to be considered a big factor.

Less than a decade ago the low dollar saw a mini boom in work coming into the country, export growth and stemming the flow of work offshore (having been part of that). The rapid rise in the $AU turned that on it's head very quickly.

In the meantime we continue to see the rise of new manufacturing enterprises in emerging economies - large volume / low cost often building those cheaper luxury Euro cars. Even the US saw a boom in southern states building cars.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I read a study recently about the fate of ex-Mitsubishi workers after the Tonsley shut-down in 2008.

Basically the study said that although the majority of former workers managed to get jobs, almost no-one managed to get a job that was paying more than their previous work at Mitsubishi.  Many were part-time/casual; some sold up and left SA; the news wasn't really good.  There was a lot of state and federal money put into post separation training and support but it didn't seem to do the majority much good - they were mostly worse off than before.

I do wonder at what point the economy will wilt... we already have a lot of hidden unemployed in this country, the official numbers don't represent the actual crisis in my opinion because PT and casual workers living a hand-to-mouth existence aren't officially 'unemployed'.
  Graham4405 Minister for Railways

Location: Dalby Qld
Ford Australia on Thursday confirmed it is closing its Australian car making operations from October 2016, resulting in the loss of 1200 jobs.
bevans
A big problem with this for Ford is that the current employees will have more than three years to look for alternative employment. As they find jobs and leave how will Ford continue production until the stated closing date? All that skill will have been lost to them. Nobody will want to go work for them...
  TheBlacksmith Chief Commissioner

Location: Ankh Morpork
A big problem with this for Ford is that the current employees will have more than three years to look for alternative employment. As they find jobs and leave how will Ford continue production until the stated closing date? All that skill will have been lost to them. Nobody will want to go work for them...
Graham4405

I'm sure that is part of the plan.....

Enabling them to bring the date forward.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I'm sure that is part of the plan.....

Enabling them to bring the date forward.
TheBlacksmith

Exactly, three years is such a long lead-up to closure, I suspect they will probably pull the pin earlier than that.  It will be interesting to see how many component suppliers will be left given there's only two manufacturing operations now.
  GrahamH Chief Commissioner

Location: At a terminal on the www.
A big problem with this for Ford is that the current employees will have more than three years to look for alternative employment. As they find jobs and leave how will Ford continue production until the stated closing date? All that skill will have been lost to them. Nobody will want to go work for them...
Graham4405
Not a big problem. A big saving in redundancy payments and other separation expense. Well that's my take on it.

Amid all the history bits on the various newses, Ford Australia's creation of the ute is completely absent.
  Groover Train Controller

Location: A long way from home
Not a big problem. A big saving in redundancy payments and other separation expense. Well that's my take on it.

Amid all the history bits on the various newses, Ford Australia's creation of the ute is completely absent.
GrahamH

Wasn't there and FJ ute, or did Ford have an equivalent before it?
  Valvegear Oliver Bullied, CME

Location: Norda Fittazroy
Ford started the ute in the USA prior to the War.  Over there it's known as a Pick-Up Truck.
The early Falcon had a ute derivative if my aged memory serves me correctly.
  TheBlacksmith Chief Commissioner

Location: Ankh Morpork
Ford started the ute in the USA prior to the War.  Over there it's known as a Pick-Up Truck.
The early Falcon had a ute derivative if my aged memory serves me correctly.
Valvegear

Wash your mouth out!

The ute was invented by Ford in Australia in 1932 in response to a letter from a farmer's wife who wanted a 'vehicle to go to church in on Sundaysand carry our pigs to market on Monday'. The designer was Lew Brandt. It was originally called a 'coupe utility', and that's where the name ute came from. Holden's version did not appear until 16 years later.

The American pick-up truck is not the same type of vehicle, it is essentially a truck, whereas the ute is a coupe with a tray body at the rear.
  Valvegear Oliver Bullied, CME

Location: Norda Fittazroy
I stand corrected.  Embarassed

That will teach me to rely on a bad memory !
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE

As for Ford (and Holden), they brought this on themselves. For the money being charged for these Australian made bog standard cars, you can buy a luxury car from Europe, not to mention people just aren't buying the sort of cars ford and holden make.
fabricator
Name a large size European car you can buy for the same price as a Falcon/Commodore?

As Top Gear UK said, major European cars are often just that more refined compared to USA, but they come at a price.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Exactly, three years is such a long lead-up to closure, I suspect they will probably pull the pin earlier than that.  It will be interesting to see how many component suppliers will be left given there's only two manufacturing operations now.
don_dunstan
On the current volumes, if they keep declining I cannot see the Falcon going on to the Oct 2016.

HOWEVER, I think as a few others have stated here the economy is "softening" and will continue to do so because of mineral prices. As these "soften", so will the dollar and probably give the Falcon sales a boost of sorts. There will also be a surge of sales as the last Falcon's approach.

The workers will have a big carrot at the end for those choosing to stay and I'd say the work force average age is probably far from young as this has been on the wall for sometime and Ford has probably not recruited too much young blood in recent years.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
There are no simple answers. It's no doubt the high Aussie $ (or is that low US$) has to be considered a big factor.

Less than a decade ago the low dollar saw a mini boom in work coming into the country, export growth and stemming the flow of work offshore (having been part of that). The rapid rise in the $AU turned that on it's head very quickly.
cootanee
I think history will show that the 2000's mineral boom went on much longer than expected by LNP and later ALP govt's and that both failed to control the mining industry. Rather letting it go on its own path and as such the boom in the mining sector heavily impacted on the manufacturing sector, first in generating high wages for which they had to compete, then later a high $A for which they had to now compete with these extra costs with OS manufacturers and at same time the booming low cost maufacturing economies.

Manufacturing can be forever, mining is as long as the deposit holds out. Perhaps next time the govt will find ways to stem the growth through higher mineral taxes linked to commodity prices, quota's or forced downstream processing.
  Jim K Train Controller

Location: Well west of the Great Divide in NSW but not as far as South Australia
As for Ford (and Holden), they brought this on themselves. For the money being charged for these Australian made bog standard cars, you can buy a luxury car from Europe, not to mention people just aren't buying the sort of cars ford and holden make.
fabricator

Jag XFR is $100,000 AUD if bought in England... $220000 for the same car bought in Australia
Lexus RX450: $46000 AUD in England.....$106000 in Australia!
BMW M3: $59000 AUD in England.... $170000 in Australia

Ford and GM did not set those prices.


Cost? .....Start with the Unions and the Australian way of life....
Ford  sell cars to make a profit... and they can't here.
  wurx Lithgovian Ambassador-at-Large

Location: The mystical lost principality of Daptovia
Wash your mouth out!

The ute was invented by Ford in Australia in 1932 in response to a letter from a farmer's wife who wanted a 'vehicle to go to church in on Sundaysand carry our pigs to market on Monday'. The designer was Lew Brandt Bandt. It was originally called a 'coupe utility', and that's where the name ute came from. Holden's version did not appear until 16 years later.

The American pick-up truck is not the same type of vehicle, it is essentially a truck, whereas the ute is a coupe with a tray body at the rear.
TheBlacksmith
Coupe Utility

  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Jag XFR is $100,000 AUD if bought in England... $220000 for the same car bought in Australia
Lexus RX450: $46000 AUD in England.....$106000 in Australia!
BMW M3: $59000 AUD in England.... $170000 in Australia

Ford and GM did not set those prices.


Cost? .....Start with the Unions and the Australian way of life....
Ford  sell cars to make a profit... and they can't here.
Jim K

Its not the cost of local manufacture entity, there is more to it.

Why is a Camry in the USA nearly 2/3 the value than the Aussie made Camry, think its labour costs, then look at other common models like Corrolla.

I live in Dubai, I did the right thing and bought a Australian made 2011 model Toyota Aurion here new. Cost me about $35,000 for the top of the range model. The top of range model in Australia is nearly $50,000 although mine isn't as nice as that one, so I think about $45,000 model is closer. The base model Australian made Camry here in Dubai is about $23,000.

Imported cars into Aussie get 5% import tax as they do in Dubai. but why are they still so expensive in Australia and Australian made cars are cheaper outside Australia? If I thought protection tariffs where causing this I'd say close down the assembly lines now in Oz.

And yes you can also buy Commodores here and they are popular as they are same size as 7 series BMW, more powerful and a lot cheaper. they are imported with Chev badges, but some guy does Commodore/Holden HSV rebadging.
  wurx Lithgovian Ambassador-at-Large

Location: The mystical lost principality of Daptovia
I'm a member of the Australian Ford Forums and as matter of interest, the thread in their Pub (like our Lounge) on the closure has gone absolutely ballistic Exclamation Thirty pages in as many days. See here.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I have a lot of sympathy for Ford workers having worked in the car industry myself many years ago.

The wages aren't spectacular but the stability of the employment would have been really good for people with mortgages and kids.  I can't imagine that many of them, particularly those who are older and have been there for a long time, will find it easy to get something like it.  The problem will be that many will be shoved into retail or service jobs paying half as much as they were getting at Ford and get told to like it or lump it; that's if they're lucky enough for an employer to be interested in them.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I have a lot of sympathy for Ford workers having worked in the car industry myself many years ago.

The wages aren't spectacular but the stability of the employment would have been really good for people with mortgages and kids.  I can't imagine that many of them, particularly those who are older and have been there for a long time, will find it easy to get something like it.  The problem will be that many will be shoved into retail or service jobs paying half as much as they were getting at Ford and get told to like it or lump it; that's if they're lucky enough for an employer to be interested in them.
don_dunstan
If the difference is that much, the wages might be part of the problem!

Nearly 10 years of boom times and associated rising costs is coming back to bite us on the smeg.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
If the difference is that much, the wages might be part of the problem!

Nearly 10 years of boom times and associated rising costs is coming back to bite us on the smeg.
RTT_Rules

The median house price in Broadmeadows is $400,000+ where the Ford plant is located; in Greater Melbourne it's over half a million.  If your household income sinks below $50,000 p/a then you are unlikely to be able to successfully service your mortgage; yet the solution to unemployment for most of the ex-Ford workers will be lower paid hospitality or retail jobs that pay the lowest wages out of all the industry sectors.

If we didn't have such ridiculous house prices and rents in this country then there wouldn't be relentless pressure to increase wages.

Tom Playford, the former Premier of South Australia, understood this which is why he set up the Housing Trust in the 1950's - so that the wage demands and hence the cost base would be lower in South Australia than in (say) Sydney or Melbourne.  Lower cost base is why he managed to attract Chrysler and General Motors to set up in South Australia in the 1950's.  The problem now days is that the mainstream media and real estate industry have convinced everyone that extremely high house prices are good for everyone - they aren't.  They are wreaking our international competitiveness.
  cootanee Chief Commissioner

Location: North of the border!
If the difference is that much, the wages might be part of the problem!

Nearly 10 years of boom times and associated rising costs is coming back to bite us on the smeg.
RTT_Rules

And now the $AU is falling (or more that the Greenback is on the ascendency).

10 years Surprised  When was the Aussie automotive industry truly viable? They have had generous pay and conditions for decades and one by one manufacturers have called it a day during the past three decades (P76 anyone... needing to move a 44 gal drum that is). Ford joins the list.

Anyone noticing the demise of our fruit growing sector - trees being ripped up with a 15 year lead time to replant and become productive again.
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
Anyone noticing the demise of our fruit growing sector - trees being ripped up with a 15 year lead time to replant and become productive again.
cootanee
15 years lead? I have extensive knowlege of commercial orchards, that is not true, or you are referring to some sort of fruit tree (I have never heard of) or maybe something truly useless like avocado - even these wastes of space produce fruit in 4-6 years. Pyrus, Malus, Prunus have decent production in about half that, when I was in high school we completely replanted an orchard of those three in particular, some of the bigger apples and pears were throwing 100kg/tree by the time I left, and that was about 4 years post plant out. If it wasn't a commercial operation they'd have gone onto 200+kg in a couple more years. My own apricot tree which is not in commercial use would probably throw well over 200kg of fruit every season, we don't even bother netting anymore because not even our industrious feathered friends can properly retrict the crop anymore. It's probably about 10 years old now, but has been producing epic crops for at least half of that, and even it is were 10 years and just coming to production that's fairly well inside your 15 years.
  Valvegear Oliver Bullied, CME

Location: Norda Fittazroy
Back to cars - I'm old enough to remember some of Ford's golden days in motorsport with factory-entered cars.

One of the greatest had to be the 1968 London to Sydney Marathon.  Ford entered three GT Falcons. Such big cars horrified most of the Europeans who believed that smaller, nippier cars were the answer. The Falcons finished third, fifth and eighth, and won the Teams Prize handsomely, leaving many pundits with egg on their faces.
KAG 001 was crewed by Harry Firth, Graham Hoinville and Gary Chapman; KAG 002 by Ian Vaughan, Bob Forsyth and Jack Ellis, and KAG 003 by Bruce Hodgson and Doug Rutherford.
The new cars were handed to Harry Firth, and his magic was then turned loose on them.  Things like gas welding all the body seams, filling the hollow section side rails with two-pack polyurethane which provided rigidity without weight and so on ad infinitum.  The engines were blueprinted ( naturally ) and slightly de-tuned to cope with the expected poor quality petrol which was going to appear in places. There were no flies on Harry.

I was at a Control Point at Edi in North eastern Victoria, and it was great to see the three cars in such good shape. KAG 002 still lives at Ford's museum in Geelong. It competed in some events in Australia after the Marathon, the last one seemingly in the hands of Ian Vaughan and Barry Lake.

(Exit stage left with dreamy expression Confused )

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