Ford Australia’s decision to save the in-line six-cylinder engine that it has built in Geelong, west of Melbourne, for the more than 40 years is certainly a positive move for the Australian car industry, but it still leaves a lot of unanswered questions.
– David Twomey
As a result of the decision announced by a beaming new Ford Australia president (and Geelong local boy), Marin Burela, flanked by the Victorian premier, John Brumby, and Federal Industry Minister, Senator Kim Carr, the plant will not close in 2010 as planned and the Ford 4.0-litre, six-cylinder engine will be engineered to meet the stricter Euro IV emission standards that come into force that year.
The company says the development means that 400 jobs at Ford will remain, while an estimated 900 jobs in the component industry have also been saved.
“This decision is good news, not only for our employees in Geelong, our suppliers and the surrounding community, but also for the many fans of our I6 engine, which will now be re-engineered to achieve Euro IV emissions standards,” said Mr Burela.
“This is the first step in a broad product investment strategy to reduce emissions and deliver improved fuel economy across our locally built vehicle line-up, including Falcon, Falcon Ute and Territory.”
To carry out the plan Ford Australia, with the blessing of its US parent but no financial help, will stump up $21 million, while the Federal Government will reactivate a previous grant of $13-million that was cancelled when the closure announcements was made, and the Victorian Government will tip in an unspecified amount of money.
Premier Brumby refused to be drawn on how much help the state government was offering but said it was “substantial”.
CarAdvice understands most of the changes needed to bring the engine up to Euro IV were already developed when the decision to close the engine plant was announced, but more recent developments in engine calibration and refined catalyst technology will be incorporated into the new engine.
Ford spokespeople seemed to indicate that the advances had been so significant over the past 18 months that what seemed impossibility then was now achievable.
Mr Burela also made much of developing further powertrain options for the Falcon range but wouldn’t be drawn on just what those options were. He indicated some would be announced in coming months and CarAdvice believes some, at least, will entail much more sophisticated and refined LPG engines, which would give Ford an opportunity to build on the Falcon’s already leading edge in the LPG powered market.
“Our investment will go into developing the engine to meet Euro IV emission standards, standards that currently don’t exist in Australia, standards that will in fact take the whole development process of the engine to a whole new level that will deliver the environmental targets and standards that will make it viable into the next decade,” Mr Burela said.
He added that Ford Australia was actively working with companies that form its local supply chain, who had thought the engine was dead and buried.
“It’s an incredible day for our suppliers, who have supported us through thick and thin, many of whom have felt the pain and the difficulties that the industry has suffered as a whole over the years and certainly over the last few months,” Mr Burela said.
“We will continue to source components from those suppliers and we are talking with them as we speak about what this will mean to them.”
Mr Burela began his plan to save the engine plant with late night phone calls to Senator Carr, within days of getting the top Ford Australia job.
The two men agreed to meet and discuss the plan as soon as Mr Burela arrived in Australia and as Senator Carr said “it was all done in six weeks.”
Mr Burela refused to be drawn on the future of the Ford Falcon and its rear-wheel-drive platform but did indirectly indicate that the decision to stick with the in-line six-cylinder engine meant that the current FG Falcon would probably be around longer than originally planned, and could be expected to remain in production until about 2015.
The engine will certainly appear in the next Ford Territory, which we believe is still on schedule for a launch in early 2009.
Just how many years the decision will eventually mean for the huge plant that dominates the entrance into the Victorian coastal city is still unclear but Mr Burela has shown that he can think outside the square, that he is quite well connected when it comes to dealing with the political forces in power and he can take tough decisions, both cutting the workforce where he believes it needs cutting but at the same time saving an iconic Australian engine and its manufacturing plant.