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We're in better shape than most - Ford

Leveraged: Ford Australia's 'wide-body' Press Line 21, part of a $55 million upgrade at the Geelong stamping plant, completed in early 2008.

New Ford boss has no plans for more job cuts, but Australia's future is in US hands

Ford logo14 Nov 2008

NEW Ford Australia president Marin Burela says he has no plans for further job cuts, claiming his company is in better shape than its rivals following widespread local and global “divestiture”.

Ford's new Australian chief also said the nation's number three car-maker will “benefit on multiple fronts” from the federal government’s new car industry plan, but admitted the local subsidiary, which made an $87.2 million loss in the 2007 fiscal year, was inextricably linked with the success or failure of its parent company, which last week posted a $US2.98 billion third-quarter loss.

Mr Burela, who took over the top job at Campbellfield on October 1 and within two weeks called for a further 450 redundancies - in addition to the 350 announced in August, bringing the total number to 800 before Christmas – said Ford Australia was “holding its own” in challenging times.

“I have no plans for further job cuts,” said Mr Burela in a media phone conference on November 13, one day before newly redundant Ford workers began leaving Ford’s Geelong and Broadmeadows plant for good.

It is understood Ford received more than its required number of voluntary redundancies from both blue and white-collar employees, following the offer of financial packages comprising 3.1 weeks pay for every year of service (capped at 75 weeks), plus $1000 for every year of service, sick leave and long-service leave.

“We’ve taken tough decisions, ones that I certainly didn’t take lightly. We’ve worked very, very closely with our unions and our people, the process that we’ve gone through has been extremely professional and sensitive, and I’ve received an enormous amount of feedback across the plants and across Ford of Australia, acknowledging the way that we’ve actually handled it – the dignity, the sympathy, the understanding.

“Just so that you understand, I have written personally to every single employee thanking them and wishing them and their families well. I think this is the first time this has ever been done in the history of the automotive industry here in Australia, because I wanted to personally communicate with them for what they’ve done and the feedback from just that as an initiative has been overwhelming,” said Mr Burela.

Asked if Ford’s local operation had a commitment from Detroit that secures its short-term future, Australia’s new Ford chief said his company was fundamentally linked to its parent company’s success.

“Clearly we’re very, very much linked and tuned into our parent company,” he said.

“Nevertheless, our focus here in Australia is to ensure that we’re generating the right level of cash to in fact be able to sustain ourselves and the reality is it’s been challenging and tough, but we’re holding our own.

“But we are obviously very, very linked to the parent company’s fortunes and the way it moves forward.”

 center imageMr Burela (left) said Ford Motor Company CEO Alan Mullaly’s foresight in securing capital and selling off Aston Martin, Jaguar and Land Rover over the past 18 months had made the Blue Oval financially stronger than this its rivals.

“Allan Mullaly when he came to Ford Motor Company saw the cloud on the horizon and one of the very first things he did was to go out to the markets and secured a level of funding that, when one looks back now, would say that was an absolute stroke of genius. The divestiture that took place once again under his leadership was also a stroke of genius.

“I think we’re probably better positioned in terms of where we are versus any of our competitors. Allan has come out publicly and said that as well.

“Nevertheless he and the team are continuing to work with the authorities and the government in North America in terms of arranging the appropriate level of industry support.

“I think based on where we sit, although things are challenging and very tough, we’re holding our own.”

Mr Burela said Rudd government’s $6.2 billion automotive industry package, titled ‘A New Car Plan for a Greener Future’ and announced on November 10, was not a “bail-out” but a blueprint for sustainability for Australian car-makers by encouraging them to invest in the latest technology.

“My view is there is enough there for us to work with. We’ve just got to go and work at it. This package quite frankly isn’t a bail-out of the industry because what the government has done is said ‘we’ll invest in you if you invest in yourself’.

“That’s the clear message. ‘What we’re going to do is invest in you to make smart decisions by bringing forward sustainability as the clear framework for what the industry should be in Australia.’“The onus is now back on us as manufacturers to say ‘how do our cycle plans and product plans fit into that and do we need to go out there and do some rethinking about the things we thought before versus the things we need to do for the future?’.”

While he said it was too early to detail how, Mr Burela said Ford Australia would benefit from the new car plan in a number of different ways.

“I think we’ll benefit on multiple fronts. The green car fund is going to stimulate the manufacturers to look at how does it move forward from 2009 and beyond.

“Have we looked at that and what are the things we’re going to do? Too early to say. What we need to do is now dissect the plan in terms of its detail to look at number one where is the market going and how does the plan support the market growth over time and how do we then ensure that we are investing in technologies and products that actually fit the market and that also plays to the strengths of the plan.

“That’s what my team and I are doing at the moment, quite frankly.”

Asked if Ford’s plan to manufacture the next-generation Focus small (C-segment) car in Australia from 2011 would qualify for the new federal co-investment funding, Mr Burela said the plan would be revisited to ensure it attracts maximum leverage.

“To be honest I don’t know where the qualification would be, but what we would need to do is go back and look at the plan and say are there things that we should add to the C-car plan that will then help make the C-car plan even more viable than what we believed it to be at the time we made the decision to build it in Australia. So can we compliment the current plan that we have,” he said.

It is not known whether the development of new direct-injection LPG versions of the Duratec V6 due to power the Falcon by mid-2010 or a diesel version of the facelifted Territory on sale next year will qualify for funding under the expanded Green Car Innovation Fund, which has been brought forward to commence next year and more than doubled to $1.3 billion until 2020.

Asked if the new funding package would change the future direction of Australian car-makers and, if so, why it took financial incentives from government for them to do so, Mr Burela said: “I think it will make the industry go back and reflect. It will seriously start looking at environmental issues.

“I’m pretty pleased with where we are. We’re holding our own in terms of where we stand in terms of emissions. From an emissions standpoint we’re neither worse nor better than anyone else - we’re about on par.

“The real core strength that we have is that we’ve been working very hard on sustainability issues in other parts of the company and I’m going to make sure we use that as an enabler for the plans we have in Australia so that as we move forward that our product line-up absolutely plays to the strengths of the plan and society. The world has changed rapidly over the last five or six years ago.

“When I was announced (as new Ford Australia president), Kim Carr had our first conversation within about five days and since then we’ve had continuous dialogue about how we make manufacturing a sustainable industry from an automotive perspective.

“I am convinced based on what I’ve seen from the PM and his team that they are absolutely determined to have a viable automotive industry in Australia.”

Read more:

Look to Asia, not the US

Credit crunch hits dealers

Expanded $6.2b car industry blueprint released

Suppliers still under a cloud

Holden and Ford to get greener

Local car suppliers shed jobs

Go global, says Carr

Economists say Bracks tariff modelling is wrong

Federal industry review finally revealed

Big Three take tariff fight to Canberra

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