Australia ducks near disaster as clouds clear for car makers
WHEW. That was the reaction from a lot of people to the positive results in Detroit this week for Ford and Holden. It looks like Australia has ducked a potential disaster on the globalisation front, avoiding the inevitable cull as major car makers rationalise the number of orphan products they serve up to customers around the world.
The Ford Falcon and Holden Commodore are unique to Australia and would never be approved from scratch under today’s Detroit management. They are built at factories which are not even close to the break-even numbers for output in the rest of the world.
But they still make sense for a lot of Australians— de- spite a steady sales decline in recent years— and turn a profit for their companies.
Now, thanks to intelligent business plans by the brands and the commitment of Kim Carr — recently demoted in the Gillard Government but still a firebrand who genuinely ‘‘gets’’ the car industry— with a bag of Canberra cash, they will live until at least 2016 and possibly a lot longer. At least in the case of the Commodore.
By international standards, the $103 million awarded to Ford is not a lot of money, but it’s enough to push the Falcon and Territory through a major makeover that will keep them alive until 2016.
A similar deal, or something better, is now a foregone conclusion for Holden. And that’s great news for anyone who supports Australian manufacturing and thinks the country needs to be more than just a giant strip mine. It might not be a popular position — and lots of people question the amount of support given to car making — but Mr Carr points out even mining and agriculture get some form of financial support from the Federal Government.
Apart from the various factories in Melbourne and Adelaide, there are many smaller component companies who will celebrate the good news for Ford and Holden, and lots of engineers who do other work for their global bosses who will still have the local foundation needed to ensure they have a job in the future.
Australia is one of only 13 countries in the world that is capable of doing everything in car making, from the first design sketches through to final assembly.
Losing that capability, or even dealing with a serious threat to that capability, would have been a disaster.
There has been a lot of gloom and plenty of uncertainty about Ford and the Falcon in recent months, but just as the weather at this year’s Detroit auto show has been as unseasonably warm, so too the clouds over Broadmeadows have cleared.
Tuesday was easily the best day in the recent history of the Australian motor industry and one that will go down in the history books as a turning point. Thankfully, things have turned the right way for Ford and Holden, and also for Australia.