Ford could lose Focus over $20M
6 Feb, 2008
69 Comments 
Labor is planning to withdraw some $20 million of a grant promised to Ford Australia by the former Howard government which could now jeopardise plans to build an new four-cylinder engine line (for the coming Focus range) at its Broadmeadows plant.
The grant of some $52.5 million for special assistance was announced in May 2006, and which Ford has already received about $32.5 million. But the remaining $20 million was not due to be paid until late 2009.
The money was intended to help start production on the new Falcon project (known as ‘E8′ – the V6 powered 2010 model) but Ford sought to alter the agreement so the money could be spent on developing the four-cylinder Focus.
Production of the Focus, Ford’s first locally-made small car in a decade, is due to start at Broadmeadows in 2011, creating 300 jobs, but the new contract between Ford and the Government was not formally amended before the November federal election, creating a loop-hole for the Rudd Government to now withdraw the funding.
Ford now has legal grounds to sue (breach of faith) which has been backed by the Australian Government Solicitor.
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February 6th, 2008 at 8:08 am
I hope we don’t lose Focus production over this.
Focus would be an absolute hit built here, we need a local four banger!
Some of the Mitsu boys could fill those 300 jobs in a heartbeat – plus they get to move to Melbourne – BONUS!
Vote:February 6th, 2008 at 8:15 am
Absolutely Matt…………..Hope Ford win this.
Vote:February 6th, 2008 at 8:16 am
You’re early BM! Yeah I do too, and I’m not even a Ford man!
Is it just me or does the government seem hell bent on destroying the Aussie car industry?
*gasp* was the controversial?
Vote:February 6th, 2008 at 8:25 am
Yep Matt……….kids back at school.
Funny how they announce that they are giving 52 million towards the Mistu closure one day and take away from Ford the next.
Vote:February 6th, 2008 at 8:53 am
Its a labour government – they don’t like big business unless their own unions control it.
Vote:February 6th, 2008 at 9:08 am
Speaking of ford focus, does anyone know when the new facelift model is due this year?
Vote:February 6th, 2008 at 9:18 am
Typical Labor government, this is why I voted for the liberals! bah!!!!! You people who voted for this crappy government are going to get what you never thought you would get. A SH*TTY economy run by the unions. Hopefully this does not force the closure one day soon of Ford plant in Broady, otherwise no more beautiful Typhoons! THANKS TO THE LOT OF YA!
Vote:February 6th, 2008 at 9:44 am
You just can’t help blurting out your baseless political bigotry. Try explaining the fact that you can be fired anytime by your company during AWAs. The union is out there to protect workers and their rights. Mitsu closed not because of the new government, but simply because sales are down and they’re not performing well in other countries. Ford also laid off several labourers during your beloved PM’s reign. Now figure that out.
Vote:February 6th, 2008 at 10:12 am
Matt: “plus they get to move to Melbourne – BONUS!”
Youv’e got to be kidding!!! Nothing could be worse!
Melbourne, yeah, only an hour to get to work, shitty houses cost a fortune, polution and oh yeah youv’e got Bracks!
BTW nice WORKING FAMILY frielndly Labor Govt – NOT. Rsoles if they do this.
Vote:February 6th, 2008 at 10:46 am
Fred, of course now you get fired guarenteed because the Labour Government doesn’t like manufacturing for some obscure reason.
Whats AWA’s got to do with a stupid decision by the Labour Government who probably are doing this for political points. After all it was a Liberal decision, so they have to reject it so that the liberals don’t get any credit for helping local industry.
A real mature approach. But then again we have Krudd 07 who is more interested in scoring well in the polls than running the country.
Its a shame a local Focus is exactly what we need to make here.
Vote:February 6th, 2008 at 10:56 am
has anybody else noticed two completely random messages.
Vote:i nearly fell off my seat in laughter.
well done Kuntermann and Cunntymann
February 6th, 2008 at 11:28 am
Bret ,
its Brumby, Idiot, you must be From SA?
On the subject of cars, id be surprised if a new 2011 Falcon gets made in Australia at all, i reccon its dommed.
Vote:Ford should of gone the GM route and exported Holdens to the US. More of a business case i believe.
There already hinting the small car route (Focus) and shifting funds from Large cars to small cars.
Doesnt make sense to me at all when the commodore was the largest selling car in 2007?????
February 6th, 2008 at 11:38 am
Ben…
the high aussie dollar is making exports for Holden and Toyota no big profits, they are breaking even.
Vote:Why do think GM has decided not to export more VE models to the US.
GM and Ford both have engineering bases in AUS now and thats how they will survive.
I can bet Ford will not pull focus production over 20million, they will sue and win.
The biggest selling model may not make the biggest profit, also just because you sell the most doesn’t make your company the healthiest either, how else do you explain Mazda selling 65,000 cars a year in AUS and yet making prportionatley more profit than Toyota AUS who sold over 200,000 cars a year in AUS…
February 6th, 2008 at 11:52 am
Trust those labor retards.
Vote:February 6th, 2008 at 12:00 pm
Bloody unionists. Is all I can say, so since Rudd has been PM how many interest rate rises have there been, at least 3 i know of. What about AWA’s? I was getting paid more on an AWA than i am now. Plus companies don’t fire good employees to save money because the guy who comes in could actually cost them a lot more money in f**k ups. Isnt it the companies responsibility to handle their staff not the government. If someone isn’t doing their job shouldn’t they be sacked. Unfair dismissal laws are still current so if you lose your job over “nothing” make damn sure it was for “nothing”.
Anyways all local manufacturers will only survive if they have an engineering base here, which both Holden & ford have but Toyota do not. Exports help but being able to develop a global platform here which other cars are based off will keep Holden & Ford Oz running, if Ford USA take their heads out of their arses and realise whats going on.
Vote:February 6th, 2008 at 12:04 pm
Ben. Idiot. Who cares, anyway its less than the MELBORING GP losses each year.
Yes I’m from SA, and bloody proud of it. Did you know Vic is the lowest ranked state amongst all others when asked “if you had to move interstate?” in a national survey. And I didn’t start the interstate BS.
BTW you don’t have much of a clue about the topic at hand do you. 2011 WILL be manufactured in Aus. Model beyond that, who knows?
Vote:Holden make little on US exports, and numbers are low compared to ME exports.
February 6th, 2008 at 12:22 pm
Hope we dont lose the Focus to be build in Vic….This could spell the demise of Ford producing any cars in Australia & higher unemployment in Victoria.
Vote:How short sighted is the Fed Government….bunch of idiots. No wonder Rudd needs people to tell him what policies he should have via 20/20…..he has NO policies except to screw the automotive industry up.
February 6th, 2008 at 12:29 pm
err… when referring to the political party it is “Labor” not “Labour”. Alborz can you get the article fixed so the retards bagging one of the other political parties know how to describe the political party reportedly sitting ever so slightly to the left of the political spectrum.
Vote:February 6th, 2008 at 12:44 pm
Glen, there has only been one interest rate rise so far under the labour government because there has only been one opportunity for the reserve bank to meet. Last one was 7th of november 2007 during the election. Being an economist, i knew interest rates where going to be increased way back in september and the RBA was going to put IR’s up in november in order to not fall behind in controlling inflation through 2008 due to no meetings between the 7th of Nov and yesterday. No matter what government won, the interest rates were still going to go up, if howard won we would be cursing the little monkey and saying he should be sacked.
What i dont get is, why is the government even intending on pulling the funding just because it wont be directed at the falcon. HOW SILLY, as long as its a car built here and takes up production capacity it will benefit the industry. SILLY SILLY SILLY.
Vote:February 6th, 2008 at 1:00 pm
Minnow…
Vote:Bravo! someone who understand that interest rates aren’t directly related to what goverment is in power.
February 6th, 2008 at 1:00 pm
Minnow, correct, well sort of.
Vote:I agree 100% with your last comment (but then its a no-brainer).
On interest rates, 1 “official” rise, however most lending institutions have put up rates twice, whilst some have had 3 rises.
February 6th, 2008 at 2:53 pm
typical labor!
Vote:February 6th, 2008 at 3:11 pm
“Anyways all local manufacturers will only survive if they have an engineering base here, which both Holden & ford have but Toyota do not.”
That’s funny, then who do I work for????
Vote:Toyota Technical Centre Asia Pacific Australia Pty Ltd
http://www.toyotatech.com.au
February 6th, 2008 at 3:23 pm
It says in the article: “Labor is planning to withdraw some $20 million of a grant promised to Ford Australia”
Where is the info about that?
“Frekle-One” and TP, make sure you both clean your self up before posting.
Vote:February 6th, 2008 at 3:24 pm
Bret, yeah the official cash rate has changed once. What the institutions are doing is building in their expected inflation in the future so that they dont lose value. So interest rates with those institutions are reflecting expecting higher inflation.
Vote:February 6th, 2008 at 3:29 pm
By the way, 20 million is worth what 1000 cars? I dont think this will have much of an impact on long term plans for ford. They are only going to sew because its going to impact on their yearly profit which they have to please the shareholders. I think they will get it back.
Vote:February 6th, 2008 at 3:44 pm
What really shits me about this article is the short sightedness of the Labor goventment. They claim to govern for the ‘People’ yeah right! $20 million in todays manufacturing industry is chicken feed, If the closure of Mitsubishi shows one thing it is to survive on ONE small volume product is to spell doom for the company as a whole. At least if Falcon and Focus are built together this serves to let Ford Oz do further engineering project for the parent company. I do know how this game is played because the company I work for is based in South Australia and owned by a French/Danish company. And if we don’t build and engineer the product to suit the market we would simply be a supplier and not a builder/designer and exporter. It is really a shame that Labor continue to degrade the country in their short term in office only to apse the popular vote and not the majority! Don’t blame me I voted Liberal!
Vote:February 6th, 2008 at 4:03 pm
i say it once and i say it again…typical labor! thanks to all you fools who voted them on the heat of change for change’s sake!
interest rates up…mitsubishi closing down…what next? the return to a recession “we will need to have?”
Vote:February 6th, 2008 at 4:11 pm
umm the economy is a cycle, it goes up and it goes down. You can’t have good times all the time…
Vote:Want to blame someone?
Blame the general public who can’t stop spending and who always want more and more.
Don’t go over indulging in home equity and all the mod, lazy cons and you might actually save money and invest wisely!
If we actually controlled ourselves our economy wouldn’t go bust so quickly.
People want tax relief, why? so they can spend more money and not manage thier own budgets.
February 6th, 2008 at 4:14 pm
i agree adam..but its funny how labor is blaming howards era for rising inflation…when he should be blaming those who voted for him…but he is too gutless to lay out a real plan to save the car industry because like all previous labor governments they live on the surpluses of previous liberal governments and the money just seems to disappear into the abyss that is known as labor economic mismanagement…oh the keating days are echoing ever so loudly at the moment…
Vote:February 6th, 2008 at 4:19 pm
You agree yet continue to blame goverment!?
Vote:If you haven’t worked it out yet…all goverments blame the previous goverments.
Remember it was john Howard who failed as national libral tresurer in the late 70s early 80s.
The general public have had it too good over the last 5 years and the general public are too blame.
February 6th, 2008 at 4:25 pm
Absolut idiots!! lose mitsubishi 1 day nd ford the next absolut spark plug Kevin Rudd. Oh nd i bet if it was in queensland he would give them an extra 20 mil what a joke
Vote:February 6th, 2008 at 4:31 pm
John I agree, it’s silly how Kevin Rudd was blaming John Howard for interest rates rising, yet now he’s PM it has still gone up.
But, is there any proof in this page that Labor really are planing to not give the 20 Million? Or have you people found out that Rudd wasn’t planning to give Ford grant himself, so therefor it’s just to start a scare?
Vote:February 6th, 2008 at 4:31 pm
why does every auto blob get ambushed by idiots!?
I’m sure there are plenty of other websites to haunt…
Vote:February 6th, 2008 at 4:32 pm
Don’t get me wrong, I have nothing againts Rudd.
Vote:February 6th, 2008 at 4:48 pm
My god, the anti-labor brigade is in full swing. If there was more of these people we would be in civil war. Think about, what effect could Ruddles even have had on the economy in the space of 1 and bit months? Parliament hasnt event started yet and no policies have been implemented yet. At the moment everything is still cruising along at the same rate as it was under howard. Another thing, is the two parties are soo similar in their underlying policies they were copying each other its only the really political policies to differentiate themselves is what makes them appear different. I’m going to talk about some information that is supported by reports from the reserve bank that may upset the anti-labor brigades understanding. The reserve bank actually has said, the relative calmness of economy under the liberal government since 1996 is as a result of the “resetting” effect by the recession in the early 90’s. The policies such as implementation of inflation targeting introduced by keating helped reduce the massive fluctuations in the business cycle. If you ever took notice the interest rate at the moment is the same as it was when howard introduced the GST, which caused a short term inflation spike. Things are not bad!! calm down people.
Vote:February 6th, 2008 at 4:59 pm
i think the earlier comment regarding job losses under IR laws that howard implemented is quite ironic considering what job losses have occurred already in the auto industry.
people just dont learn.
John howards main message was warning about change for the sake of change. it seems people just cant see the bigger picture
i doubt ford will pull the focus project though.
Vote:i think a few heavy words will see that they get the remaining 20 mill. the government would also be sill to pull out now since they have already tipped in 32.5mill.
if ford pulled the pin now, they wouldnt have to pay back that 32.5mill either i would assume since it was the government who broke the agreement
February 6th, 2008 at 5:15 pm
Good point Andrew,I guess they would have to return the money! Me thinks they will go ahead but will obviously do what they can to get what was promised to them.As they should.
Vote:February 6th, 2008 at 5:30 pm
adam be nice…
Vote:February 6th, 2008 at 5:41 pm
Scrap it. Why waste taxpayers’ money on subsidies? Imports are better quality and better value.
Vote:February 6th, 2008 at 5:43 pm
MINNOW….gee whiz cobber. Think before you bleart. Peter Garett touched on policy change once they got in. They have no sustantial policies other then abolish IR laws and have a 20Twenty type summit on how to fix 10 of the most important issues over the next 10 years.
As for the two parties being similar…nothing could be more misleading! Labor\’s foundational strength is unions and ex-union members such as Bill Shorten and Laurie Fergusson are en-masse bigger then ever before. The budget they spent was over 4times the Coalitions. The Coalition would never support Unions being in the ranks. They support business and perhaps if you were in business you will get to see this. Working on building sites has taught me the realities of work and it is not good.
Maybe Rudd should make more of an effort as he had been in cruise control and staying at Kirrabilli and only attending Kyoto, Aussie Day ceremonies, cricket and not much. Great for a man who was stating how hard he will be and how important his job is. A show pony arseclown at best!
Vote:February 6th, 2008 at 5:49 pm
Haha somehwere else I belive Bret was attacking Toyota for handouts…. whats this? Im willing to swallow this bitter pill if it means an overall reduction in handouts and hey, even govt protection… actually get a competitive motor industry going rather then one that is certainly not on a level playing field for all manufacturers.
Vote:February 6th, 2008 at 5:50 pm
TonyC
Scrap what? The focus? Currently fits into your “Imports are better quality and better value” category.
If you’re talking about scraping the Australian motor manufacturing industry……. well why not. Lets shoot all animals, poisen the crops and close the mines – we can get everthing from China or Korea and all sit on the beach all day on the dole.
Try making in informed half intelligent comment.
Vote:February 6th, 2008 at 5:53 pm
TP,
Vote:And Toyota has publically threatened to be the first to leave if tarrifs and handouts are reduced. Chinese built Camrys for everyone!!
February 6th, 2008 at 5:58 pm
What good news. I can’t wait to see Ford close down. I hate FORD!!!!!!!!!
Vote:February 6th, 2008 at 6:09 pm
That would be great if Ford makes the Focus here, but the question is why do they want to make it here? I thought it wasn’t feasible to make small cars in Australia because they can be made cheaper elsewhere? From what I understand it should be pretty much the same car that the overseas markets are getting.
Like I said its good if its made here for consumers because it will be cheaper and parts will be cheaper, but I don’t see how it makes financial sense for Ford.
Vote:February 6th, 2008 at 6:50 pm
HA! Ford sucked in! FORD might win though cause they are a big company! I hope they dont win though!
Vote:February 6th, 2008 at 6:51 pm
Interesting that a lot of you are spouting anti-Labor when the prior government initiated reductions in tariffs for the car industry – which is far more damaging than the withdrawal of $20m of funding.
Secondly, it has not even been confirmed that the government is going to withdraw the funding and they may have very valid reasons for doing so based on the change in the investment from Ford and the change in the basis on which the grant was originally agreed to.
It amazes me how people have to turn everything into a political issue.
The real question is: why should the government be supporting an industry with obvious inefficiencies if the government has to prop it up through grants and tax breaks? It would be better for the consumer to withdrawal tariffs and taxes and have cheaper vehicles.
That may not be the case for the employees, but that runs counter to your “Labor is run by the unionists” argument, as the majority of employees are union members.
Vote:February 6th, 2008 at 7:16 pm
Seems Ford is reading the market changes and switching production to 4cyl engines to suit what will actually sell. Surely the Govm’t will have enough nounce to listen to this. Hope it works out.
Vote:February 6th, 2008 at 7:28 pm
Kevin Rudd is proving to be a fabulous Prime Minister, YAAAAAAAY!!!
Paul Keating was our best ever. I’m keeping my Kevin07 tee shirt for posterity.
I shall not be returning to this blog to read any of your stupid comments. You’re all crazy.
Vote:February 6th, 2008 at 7:38 pm
wow duck, dont suddenly start being biased now.
Vote:February 6th, 2008 at 8:01 pm
^^^^^^How am i being biased?
Vote:February 6th, 2008 at 8:09 pm
Terrible Duck!!!! Your attitude towards Ford wern’t that friendly! :D LOL!
Vote:February 6th, 2008 at 8:34 pm
I dont like ford thats all!
Vote:February 7th, 2008 at 12:30 am
UP YOURS HOLDEN LOVERS, after reading some of these comments makes me think dudd rudd supporters are mostly Holdenwoo drivers, no wonder rudd looks after Holden, their union looks after Labors financials, while giving Ford the red finger because it needs a grant to build an aussie 4 cylinder, bloody sad tight lip idiots.. Labor has copied policies from libs across the board, the only reason labor won is because the need for change campaign and kyoto greenhouse sign up, we have become a green nation with no proven substance or action, what is everyone in Australia doing about climate change would it be any different if Howard was still prime minister, here is Ford Australia trying to build a greener car, but then shoved back in their face with the excuse labor won’t finance any longer…GET REAL government Australia look after your own backyard before it spits you out, otherwise we will bite back where it hurts..
Rudd please pull ya finger out of ya thick ear wax, ok you have won the election, bout time you listen to the working public not just the unions.. WAKE UP PAL !!!!!!!!!!!
Vote:February 7th, 2008 at 1:34 am
aarr, the sound of sore losers still ringing in the air after the election. ^_^
Vote:February 7th, 2008 at 7:48 am
Din’t labor win by a landslide!? just checking as you would think not…
Vote:February 7th, 2008 at 9:50 am
Kelvin,
Vote:Just a correction to your missguided version of history, but it was in fact Hawke/Keating that instigated tarrif reductions not Howard. Howard actually delayed the original program by some years.
And as far as “propping” up the industry, many many industries are treated the same, not just manufacturing.
February 7th, 2008 at 2:29 pm
If any one thinks we can support four manufacturers (now three) in Australia then they need a reality check. The simple facts are that Ford’s proposal to manufacture the Focus locally does not add up. Ford will NEVER achieve the volume necessary for this to be viable. What I am alluding to is that within a few years there will be two manufacturers in Australia. Holden and Toyota. FACT.
Vote:February 7th, 2008 at 3:05 pm
Because you say so, that makes it FACT huh? Anyone can type “FACT” at the end of their statement (opinion).
The volume for Focus would include exports to all countries that South Africa currently exports to. Volume for Australia would be too low (at least until the general public finally recognises a quality small car that isn’t a Toyota), so they are obviously taking exports into account.
According to all the “doomsayers” Ford may close OZ ops within a decade. Maybe they will, if they do not I will laugh at all these “predictions”.
Vote:February 7th, 2008 at 5:17 pm
TP,
you want the playing field with no hand outs???
well that also means you dont want an auto industry in australia whether it be holden, ford or even toyota.
you need a reality check if you honestly think toyota never seeks protection from the government in terms of funding or maintaining tarrifs.
all you guys obviously dont know that government incentives to industry whether it be automotive or even picking tomatoes are part of maintaining an economic balance.
up here in QLD Peter Beatie (the premier who just retired) had dragged many companies up here to settle from aluminium products, to tyre manufacturers and many more.
and guess what????? they all got pretty big carrots waved under their nose!!!!!
it is common practice for the government to fund the development of a company in order to bring them to a certain area and in turn a plethra or jobs for thew citizens in their district.
even in retail it is common practice for councils and developers to offer say 10-20 yrs FREE rent to large supermarket chains in order to attract shoppers and smaller retailers. and commercial rent on a small site can easily be 2K a week for around 100m2.
so just do some quick math on what the council cops to have a large retailer move in for 20yrs…….
some people need a reality check
Vote:February 7th, 2008 at 5:42 pm
Andrew yes I want a level playing feel… and yes Im well aware that could mean the end of the auto industry in Australia. Is this a big issue? I already coverd this ages back that for the economy it would be better, cheaper cars which result would save conumsers money along with an import industry offsetting the effect of the loss of jobs in the aussie manufacturing industry. Look at the U.S, a WRX is like $30k their compared to $40k here. A top of range Lancer is $20k their, $30k here. List goes on… this is linked to the protection that exists in Australia.
Vote:February 7th, 2008 at 6:15 pm
TP,
import tarriffs have been dropping for years yet our vehicles have not been getting cheaper. how about you do a report and tell me why that is?
if tarriffs go we wont get 30K rex’s. SIMPLE.
you would be silly to think we would.
hey but even if we did, do you see it more important that we all drive around in new flashy cars sending the profit overseas whilst we all sit on our hands getting government hand outs? hey but when lots of people are out of work, who is going to pay taxes to fund the unemployment scheme.
oh but wait…….you just want cheaper cars ha ha ha ha
Vote:February 7th, 2008 at 6:59 pm
Mate protection still exists…. government handouts havent realy gone down… their still isnt a level playing field. Mind you sure prices havent gone down but features offered have, their HAS been an increase in competition in the market.
Vote:February 7th, 2008 at 8:08 pm
mate, firstly re read what you posted. i think you made an error as it would have contradicted your stance on the issue RE….. features gone down????
import taxes have gone down.
mostly, handouts exist if you develop something. what has toyota developed in AUS? bugger all……. so I’d be upset if they got more than ford and holden.
just clarify this to me…….
Vote:why do you want the Australian Auto Industry to be abolished?
February 7th, 2008 at 10:14 pm
Is Melbourne going off the boil ?
Vote:First we lose the F1 and now Ford may not build the Focus, there are going to be lots of jobs on the line, directly and indirectly, and with interest rates on the up and up, Queensland is looking better and better each day.
February 7th, 2008 at 10:17 pm
Nissan – Gone !
Mitsubishi – Gone !
And then there were 3……..
Who is now the weakest link ? GOODBYE.
Vote:February 7th, 2008 at 10:36 pm
Lets hope none……..
Vote:July 16th, 2008 at 9:50 pm
So what was the first 32million used for? Blowing farts?
Vote: