US export "does not work" - Ford
BY JOHN MELLOR | 17th May 2006
Ford Australia president Tom Gorman told business writers last week that the mathematics just "does not work".
In what amounts to a Ford rejection of following GM Holden’s strategy of exporting Australian-made vehicles (Pontiac GTOs) into the US, Mr Gorman said the numbers do not add up.
"There are 3800 Ford dealers in the US and Ford dealers in the United States don’t do small very well," he said.
"Let’s say we are going to do 15,000 to the US – that is not even five per dealer per year.
"Am I going to get excited as a dealer about five cars a year? I want to do five a day.
"How do I do five a year? It does not work.
"That’s why anything out of here at low volume is a tricky play unless you do small specialty. We do small specialty cars in the US and we might think of Mustang as a small speciality car. But Mustang volumes are enormous, which far outstrip anything we could produce in Australia.
"So the mathematical reality is that it is very hard to do that because you cannot get critical mass.
"That does not mean that you cannot have architecture commonalities and platform commonalities with a US-based platform, but the likelihood of us exporting from here into the US?"I just don’t think it is very high."However, Mr Gorman said Ford Australia believed its newly integrated role in global engineering would give it greater opportunities to build an export capability in the future.
"But right now we do not have a program, a customer or anything," he said.
"What we have is a strong desire to be an exporter of more than right-hand drive cars. But there is a lot of water that needs to go over the dambefore we can accomplish that."Mr Gorman said Ford was watching Holden’s export success in the Middle East but Ford exports the Crown Victoria from the US to the Middle East and no decision on the future of that program had been made.
"If it turns out that the best solution is an Australian-based solution, thengood for us. But if it is not then we will find something else," he said.
"I think what the (global engineering) announcement does is give us the opportunity to be a left-hand drive exporter. It doesn’t guarantee anything but it gives us some assistance to do it if we can get it done."Mr Gorman said the annual production volume of Crown Victoria was 90,000-plus and that there was "no way" Ford Australia would add that level of production capacity in Australia.
"There is no way (we could do the Crown Victoria). That would double our capacity."However, Mr Gorman did hold out hope for Australian suppliers which could "get a foot on the door" of global platforms developed in Melbourne.
He said there was a big opportunity for the parts suppliers to get on to global programs being run out of Ford Australia.
"The lead vehicle engineering activity is going to be here (in Australia). Nothing is guaranteed, but the local suppliers, because of geographic proximity, at least have a seat at the table," he said.
"What they do with that is up to them. But if you can get your foot in the door and have the opportunity to impress people, that is often most of the battle.
"So I believe that it does give them an advantage here (in Australia) because the whole engineering team is here and they will get to work with them to build relationships and then they have access to the much larger Ford purchasing world.
"That is not to say that the parts would necessarily be made here but it clearly gives the local supply base the opportunity to do work for Ford around the world."