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Ford Australia suppliers look for overseas lifelines

Looking abroad: As Ford's Broadmeadows plant winds down, its suppliers are being helped to find opportunities elsewhere.

Australian parts-makers sit down with Ford top brass to find overseas opportunities

14 Mar 2014

AUSTRALIAN parts-makers are well placed to leverage their experience in the local car manufacturing industry to find new opportunities overseas as Ford, Toyota and Holden prepare to close their factories here over the next three years, according to Ford’s regional purchasing chief.

Ford brought a number of regional executives, some based in China, to Victoria this week to discuss with 36 parts-makers ways in which they could secure contracts to supply various Ford factories or higher-level suppliers in global markets.

Speaking to GoAuto at the Geelong-based event, Ford Asia-Pacific purchasing vice-president Keith Cooper said Australian suppliers brought valuable experience to the table and could use their understanding of the development cycle of a vehicle to give them an edge securing supply contracts, or selling their expertise.

“Understanding a car development cycle, people can underestimate that experience … how hard it is to bring somebody new on and introduce them,” he said.

“So having that experience is a real advantage to Australian suppliers.”

Mr Cooper said opportunities were available across a broad spectrum of components, from the most basic parts through to hi-tech systems for future models.

It is widely perceived that parts-makers operating in low-cost countries throughout Asia-Pacific can undercut Australian producers on price, owing to to cheaper labour rates, lower shipping costs and, potentially, more advantageous public policy.

However, Mr Cooper cited well-developed Western European countries as examples to Australia’s parts-makers, saying that high costs here did not preclude them from a seat at the global supply table – especially if they looked to higher-end products with bigger margins.

This approach would work particularly well if the components producer was to ink deals with multiple original equipment manufacturers (OEMs).

“An innovative technology that an Australian supplier has to offer, if he can offer it to multiple OEMs then he creates scale,” said Mr Cooper.

“You see that in other mature countries such as Germany and Sweden that ship it across the globe.”

Visitors to this week’s ‘supplier fair’ included ‘Tier 1’ suppliers from China, Malaysia, the US, Indonesia, Japan, the Czech Republic, the UK and Thailand, who could potentially buy components from smaller Australian producers.

The event also featured GM Korea delegates among its guests.

It is understood Toyota was also invited by the parts industry, represented by the Federation of Automotive Products Manufacturers (FAPM).

Ford Australia, which is planning to close down its manufacturing operations by October 2016, says it has already found work for eight Australian parts-makers, including Futuris and MHG.

Ford Asia-Pacific vice-president of product development Trevor Worthington also told GoAuto at the event that the Blue Oval brand also stands to benefit internationally if it uses the Australian supply base to provide either components or impart its knowledge.

“We have great capability in the supply base that we’ve worked with over the last 10, 15, 20 years that I’ve been doing this, and I think what we’ve got to for the company’s benefit is to take advantage of that,” he said.

“And so to use the expertise and the process and to some extent the ingenuity of those suppliers is a responsibility we’ve all got, and that’s why we’re here.

“It’s a great opportunity to put those pieces together.”

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