Ford Announces New Engine Direction
Ford Australia
18 July 2007
www.ford.com.au
Ford Australia today announced a key step in a new product manufacturing strategy that will allow the company to achieve production efficiencies and access global economies of scale.
From 2010 Ford Australia will import a global new Duratec V6 engine, including high performance derivatives, for use in the company's locally made Falcon, Falcon Ute and Territory model lines. The improved economies of scale resulting from the globally-sourced engine will offer increased flexibility to potentially incorporate future alternative fuel strategies, particularly diesel technology.
As a result, the company will discontinue its Australian I6 engine operations in Geelong in 2010. Redeployment opportunities will be maximised wherever possible and the company will work closely with its employees and unions to minimise the impact on the 600 people affected by the decision across engine operations.
The company's remaining 1400 employees in Geelong and 3000 in Campbellfield will not be directly impacted by the decision.
Construction of the company's new Research & Development Centre, announced in 2006 as part of Ford's $1.8 billion Australian investment program, will continue and is due for completion later this year.
Significant investment programs in new emissions laboratories and wind tunnel technology at Ford's test facilities at Lara will also continue, along with usual operations at the company's stamping plant and Ford Discovery Centre.
The decision to introduce the new engine and discontinue engine operations at Geelong follows industry-wide changes in consumer behaviour, including lower demand for large cars and the corresponding increase in popularity of smaller, imported vehicles. These changes have seen sales of locally produced vehicles as a percentage of the total industry in Australia fall from 36.1 per cent in 1998 to 19.4 per cent year-to-date in 2007 (Source: VFACTS).
"The Australian car market has fundamentally and permanently changed," said Ford Australia President Mr Tom Gorman.
"Our new engine strategy is a direct response to the lower manufacturing levels of locally produced large vehicles. Although we remain committed to our current local vehicle lines – Falcon, Falcon Ute and Territory, it is imperative that we improve our ability to respond to the increasing consumer desire for alternative fuels, improved performance, and better fuel economy while spreading the investment required across a broader base of vehicles. Importing the new engine from 2010 will allow us to achieve these goals."
The new engine will be sourced from high volume US engine facilities that are anticipated to produce approximately one million engines per year by 2011. In contrast, Ford Australia's engine operation currently produces 70,000 engines each year.
The next stage in Ford Australia's new manufacturing strategy is to improve the capacity utilisation at its Campbellfield manufacturing plant.
"We are currently investigating a number of alternatives that will allow us to return our Campbellfield manufacturing facility to 100 per cent capacity," said Mr Gorman.
"We look forward to working with our employees to ensure we can deliver on the next step in our process to continue building our business here in Australia."
Ford Confirms End Of Local Engine Production
Ian Porter
18 July 2007
www.drive.com.au
Ford Australia says dwindling large-car sales have forced it to replace its locally built in-line six-cylinder engine in 2010 with an imported V6.
Ford Australia has confirmed rampant speculation by announcing it will cease manufacture of its Barra in-line six-cylinder engine at Geelong in 2010.
But the company also indicated that some of the 600 jobs lost in the regional centre could be offset by further hiring at the Broadmeadows assembly plant, where – as exclusively reported by Drive – the company is planning to introduce a thrid production model next to the Falcon and Territory.
Ford president Tom Gorman said the decision to close the engine plant was not completely locked in yet as the company had agreed to a State Government request to conduct a feasibility study into assembling or even manufacturing the Duratec V6 engine it wants to use after 2010.
Mr Gorman said the company would conduct the study `"with an open mind'', but he indicated that the numbers were against a local engine.
"The engine we will be taking from 2010 will come from an engine facility that is going to produce over one million engines a year and the economics of that are quite powerful.''
He said Ford Australia could not justify the investment that would be needed to tool up for a new six-cylinder engine at Geelong when production volumes would only be 70,000 units a year.
"Having an orphan engine is a tough road to hoe, particularly when volumes are so small,'' Mr Gorman said.
Gorman said it had been a difficult and emotional decision given the impact it was likely to have on Geelong and the company's workforce in that city. After the engine plant closure, there would be around 1,400 people manning the panel-stamping plant and smaller operations in Geelong. There are currently 3,000 people working at Broadmeadows.
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Ford Workers 'Shattered' & Government Offers Support
Leo Shanahan
18 July 2007
www.drive.com.au
Ford Australia has this afternoon confirmed they will bring to an end 81 years of engine manufacturing at Geelong at the cost of 600 jobs in a move that will devastate the local economy.
Ford workers leave the Geelong foundry to learn their fate. Photo: Jason South
As predicted, Ford said it a statement today that they would stop production of their in-line six cylinder engine and replace it with an imported V6.
"From 2010 Ford Australia will import a global new Duratec V6 engine, including high performance derivatives, for use in the company's locally made Falcon, Falcon Ute and Territory model lines," the statement said.
"As a result, the company will discontinue its Australian I6 engine operations in Geelong in 2010. Redeployment opportunities will be maximised wherever possible and the company will work closely with its employees and unions to minimise the impact on the 600 people affected by the decision across engine operations."
Earlier, "shattered" Ford workers learnt their fate as the federal government the job losses.
Victorian premier Steve Bracks and Prime Minister John Howard vowed to help affected workers find new jobs shortly after the announcement.
Australian Manufacturing Workers' Union (AMWU) vehicle division federal secretary Ian Jones said the workers felt cheated as moves were underway to cater for Ford employees put out of work.
Mr Jones said the state and federal governments would fund a $24 million regional development package, aimed to help the 600 workers secure suitable employment.
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Engine Driven On Long Past Its Use-By Date
Richard Blackburn
19 July 2007
www.smh.com.au
Ford's ageing six-cylinder engine has been living on borrowed time since 2005, when the Federal Government told car makers it was planning to introduce tighter emission laws for all new cars on January 1, 2008.
Faced with a rumoured bill of up to $40 million to upgrade the engine to meet the emission requirements, Ford - and other manufacturers - successfully lobbied the Government to delay the introduction of the laws until July 2008 so that the new Falcon could be launched in March, before the deadline.
That allowed the company to use its six-cylinder for the 2008 Falcon, effectively extending the life of the engine - and the employment of workers at its Geelong engine plant - by two years.
But the Government reprieve also means that Australia has slipped further behind the rest of the developed world in its emission regulations.
In Europe, any new model launched after September 2005 was required to comply with Euro IV emission rules and all cars had to comply by January 1, 2006 - four years before their Australian-made counterparts.
At present, Australian cars are only required to be Euro III compliant, although the majority of imported cars on the roads are Euro IV compliant.
All European cars launched after September 2009 will have to comply with the next standard, Euro V - nine months before Australia adopts the older Euro IV standard.
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Ford's Winning Way Forwards
Joe Kenwright
20 July 2007
www.carpoint.com.au
In the long run, the end for Ford's unique local engine can only be good news for Australian motorists and Ford employees.
Would you be prepared in 2010 to pay an extra $2000 for a Falcon because its engine is made in Geelong? No? Ford didn't think you would either which is why it was forced to tell everyone this week that it won't be wasting grants from Aussie taxpayer funds trying to build one.
If Holden is a precedent, displaced Ford workers will soon face new opportunities that must come out of this latest move. Because the end for the current engine is still three years away, it is way too early for substitute activities to be announced.
Let's look at the facts -- some of which have been a casualty over the last week.
Holden built its last inline six in 1985. Holden was so broke it didn't even have the resources to convert its own engine%2