Ford tweaks production again

FORD will take another down day at its Broadmeadows plant in Victoria on March 6 as it juggles output to keep it in line with demand.

The latest move to trim output is part of a strategy to quickly adjust production to prevent another stock build-up which prompted heavy cuts last October.

Toyota and Holden recently announced bigger cuts to output, with Holden planning to take 10 production days out of its schedule in April while Toyota will cut output by 4000 cars between March and May.

A day’s production at Ford represents about 200 to 220 vehicles.

Ford Australia president Marin Burela told GoAuto at the Melbourne Motor Show that Ford was monitoring the volatility of the industry on a weekly basis and fine tuning production monthly.

“We are running well,” he said. “Our current throughput is about balanced with demand.”

He said that, while Ford had been quick to realise in October that the market had changed dramatically, there were other negative factors now affecting demand.

“Who would have predicted the floods in Queensland? Who would have predicted the devastation we have experienced in Victoria?“Those things have an immediate impact on an industry like ours. They’re the things that destroy confidence and divert people from the normal things they do in their lives,” he said.

Mr Burela would not say if Ford was viable at the current production rate, saying only that the market was “very challenging”.

He said the adjustments Ford was making now were smaller than those of the other car producers because Ford moved sooner.

“We see our competitors coming out with statements about how challenging it is and I think the thing that we did that our competitors did not foresee was that the industry was going to change,” he said.

“We took tough decisions back in October, and we attracted a bit of criticism, but we thought it was the right thing to do.”

In August, Ford said it would retrench 350 workers in November and, in October, increased that number by 450 to 800 when the full extent of the global economic crisis had become evident.

The first cut was to reduce output by 23 per cent, but a number was not given for the second round of cuts.

Ford also took 10 down days between the November cuts and Christmas to bring inventory down.

Mr Burela said he was astonished by the reaction of Ford staff when he and the leadership group briefed the management team on the plan to reduce the size of the whole company, including white collar workers, last year.

“I had to deliver a very difficult message about why we were going to restructure the company and how we were going to do it,” he said. “It was received with the utmost respect.

“I had a guy stand up and say ‘I have been here many years and I want to say the way you and the company have handled this is just first class. I will be your first volunteer’.

“And we had a round of applause, after we had told people were going to restructure the company.

“I wrote to every person who was leaving the company personally. I thanked them. I wished them well, and their friends and family. The response we got was overwhelming.”

Apart from the March 6 down day, Mr Burela said Ford was examining every part of its business to reduce waste and operating costs.

“We are under incredible pressure to maintain the overall business.

“We are working on all the fundamentals, taking out areas of waste that don’t add value.”

He said the company had established several task forces to carry out the assessments.

He said the company had already found a way to save $350,000 a year just on the supply and use of stationery.

“All of these ideas are out there and it is not until you get people looking at the value of the things we do that you start to see the waste,” he said.