Monday, May 27, 2013

The Real Cost of Falcon's Demise!

Before we get all emotional about why Falcon failed to get traction outside the Australian market we need to be reminded of the major contributor to the end of this iconic model.

The answer is simple: independence! Ford Australia is known colloquially in Dearborn as ‘The Falcon Motor Company of Australia’ and that’s the major reason for its ultimate demise. However, others also paid a price for this independence!

The Ford Australia Falcon Team (over the past several decades) fought so hard to retain its uniqueness and its existence, that it simply slipped from relevance to the Ford global model catalogue.

It could not be profitably exported because it simply did not align with any other global Ford model, and its unique parts, service and training requirements meant that it was simply too costly to ‘support’ in export markets.

This ‘uniqueness’ has also had a serious and very deleterious, knock-on effect for the Australian parts suppliers who supported Falcon. Because Falcon was both uniquely Australian, and outside the Ford global supply chain, Ford Australia virtually forced Australian component suppliers to produce unique components for a car (Falcon) that could not be used in any other Ford car anywhere else in the world. Thus, Falcon was so unique, that its demise will take down an unnecessarily large number of Australian component manufacturers. Some news commentators have said that for every single job lost in Ford manufacturing, there will be four jobs lost in the component industry.

This, by itself, is a travesty. Ford Australia, by keeping Falcon going, against all logical assessment, and spinning off on a trajectory far way from Ford’s global product developments, has not only cost Ford employees their jobs, but also many more jobs in the fragile Australian automotive components industry.

Equally sad, is that if responsible members of successive Australian federal governments had taken a cold, hard assessment of the local manufacturing situation (instead of the politically-expedient course of pumping money into a dead and dying business), would understood that investing in helping Australian component manufacturers gear up to supply global makers - would have had a greater, and more beneficial outcome to retain local manufacturing and design skills.

Australia’s component manufacturers have demonstrated many, many times that they are flexible, innovative and energetic in developing solutions; manufacturing to tight budgets and deadlines; and responding positively to the huge demands placed on them by Australia’s car manufacturers. When you hear manufacturers talking about ‘getting costs down’ you can bet a component supplier somewhere is getting kicked to cut their profit margins and sell their goods to manufacturers for a cheaper price.

Australia’s component companies have existed completely at the mercy of the car makers. They need their business, just to stay afloat, and the fact that past and present governments have not recognized their world class skills is another travesty.

This is where Australia’s true future in manufacturing lies. Just because a car is a big, visible component hides the fact that individual, smaller components are manufactured to fine tolerances, quality and competitive cost, and this ignores the real value of investing in this sector.

If there are four jobs in the component sector that will be lost for every Ford job, shouldn’t that suggest that the component industry is bigger, and more deserving of support than the big car corporations?

Just think, properly supported and encouraged, our component makers could be making bits and pieces for every car manufacturer in the world and exporting them!

Boy, wouldn’t that be a turnaround, and a timely slap in the face for the car companies!

Thursday, May 23, 2013

Hate To Say: "I Told You So, But."

On April 14, 2011 Driving and Life made a bold prediction, that the current Falcon would be the last one designed, engineered and built in Australia - and today's news confirms the accuracy of the Blog post.

Past chairmen and management teams of Ford Australia deserve damnation for failing to conceive a post-Falcon business plan.
Successive Federal Governments deserve their fair share of shame too, for failing to recognize and acknowledge the obvious outcomes. It is shameful that thousands of loyal, and skilled workers will now lose their jobs, as a result of such careless business management, and political expediency.

 Especially as the current Ford Falcon and Territory are the beneficiaries of world class design and engineering.

It was inevitable that Ford Australia’s manufacturing operations would be shut down, once Falcon lost its lustre in the market.
Celebrations 1960 - What a sad end! (Photo - WHEELS)
This great car, and an Australian icon, was doomed over ten years ago, and would never survive the growth of smaller, more fuel-efficient cars - and their complete apotheosis, the SUV!

A recent drive experience in a Falcon XR 6 in Perth merely confirmed what a great car the current Falcon is. Conceived by the same team which brought us the Figo, the Ranger and the Territory - the Falcon drives well, is comfortable, quiet and a good-looker. I enjoyed every kilometre behind the wheel - and it returned about 9.8 l/100km over 500km!
Indigenous Falcon, at Perth's Aboriginal Art Gallery with gumtrees
Ford Australia says that its local design and engineering centre will survive, to create more great cars for Ford to sell around the world, and that is definitive acknowledgment of the skills, experience and talent that resides here.

Why have we arrived at this point? Surprisingly it’s all because of the cadre of Falcon supporters inside Ford Australia who prolonged the agony. The people who created this great icon, are most probably the people who brought about this s-l-o-w death. They simply didn’t want to see their ‘baby’ die. After all, it has ‘energized’ the Company for more than  50 years!

The same thing happened at Mitsubishi Australia when it ended manufacturing. For more than 10 years prior, the Magna-380 team fought to keep manufacturing going. A confidential source revealed that members of the product team even hid the results of damaging research from senior Mitsubishi executives, to delay a decision to end car making!

So, this means that the planning for a post-Falcon future was entirely the responsibility of the management team - and what a weak bunch they have all been. Vision, Leadership and Guidance have been completely missing, and has now seen Falcon heading for the graveyard - without a viable plan which could have kept more of the workers employed, and ensured Ford Australia could line up a profitable range of imported models.

It staggers me to think that Ford Australia thought that Falcon was its only option. Ford Australia could have developed the platform-sharing venture with Mazda, and ended up with a car based on the Mazda 6 (like the Ford Fusion in the USA); or, given how talented the Ford Australia design and engineering teams are, they could have begun development of a modular platform structure similar to that now being exploited by Volkswagen Group.

Sketches - Victor Uribe Chacon

But all this needed to be 'in the works' 10-15 years ago, or even longer - as most car platforms are planned around an eight year lifespan.

At some point why didn’t someone have the guts to speak up and say: “What happens if we don’t have Falcon?”