Australia:Ford Australia sets pace
By Neil McDonald
October 27, 2003
THE Ford Motor Co may be battling global losses of $US6.4 billion ($9.2 billion) but its Australian operation is a shining light for the embattled Detroit car maker.
Ford global operating officer Nick Scheele, visiting Australia last week to drive the new Territory all-wheel drive, was impressed with the turnaround in the local fortunes of the company.
"Ford Australia's done a hell of a job," he said.
"The turnaround has been incredible to the bottom line, which we don't disclose, but you can see it in market share, public acceptance and the quality of the new Falcon."
In July, Ford Australia reported its first profit for three years, a surplus of $20.6 million after tax for 2002 on turnover of $3.26 billion thanks to the success of the BA Falcon.
Clearly buoyed by Ford's local success, Mr Scheele said the company's global operations would break even this year, partly owing to massive cost savings of $3 billion.
Ford is struggling to fight back from losses of $US6.4 billion in 2001 and 2002, and despite efforts this year to move back to the black, executives are still smarting at a decision last week by credit agency Standard & Poor's to put a "watch" on its credit rating.
Mr Scheele said he was happy with the pace at which the company was returning to profitability under Ford's "revitalisation plan". He dismissed S&P's black mark, particularly as Ford was ahead of its own recovery projections.
"What we've done is squeeze more costs out," he said. "We've always said that if we don't get it on the revenue side, we'll get it on the cost side." Ford was also refocusing its North American operations with new small cars to tackle the Japanese, which dominated the US small car market.
With its global fortunes battered and job cuts savaging the car maker, its local operation is experiencing a boom.
Production at the Broadmeadows plant in Melbourne will increase next year to 116,000 vehicles from about 100,000 this year, and the Geelong stamping and engine facility is working six days a week to meet targets, according to Ford Australia president Geoff Polites.
Although not export-focused, Mr Scheele said Ford Australia was a huge component of the profitability of the company's Asia-Pacific operations.
In the long term, he flagged the possibility of exports of the new Territory all-wheel drive into some Asian markets.
Unlike Holden, Toyota and Mitsubishi, Ford Australia does not have a significant export program.
Despite the free trade agreement with Thailand and the prospect of one with China, Mr Scheele did not believe the local operation was caught napping without an export agenda.
"The business plan, forecast and profitability (for Territory) were all predicated on this market," he said.
India too is within Ford's sights. "India's a long-term proposition," he said.
"It will become a significant consumer and a market that will have 'fully built up' as well as 'knock down' imports. It's a 1 million a year car market and it's escalating quickly."
He believes most of the new car sales growth within the next 10 years will come from the Asia-Pacific region.
"The world market today is 55 million vehicles a year," he said.
"Within 10 years it will be 75 million, virtually all of it from just three markets – China, ASEAN and India."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....