Ford Australia production cut to three days per week

Production at two of Ford Australia’s Victorian plants has been reduced to just three days per week for most of March as the local manufacturer faces slowing sales of its soon-to-be-updated Falcon and Territory models.
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Ford Australia’s Sinead McAlary today confirmed the reductions had been made to the March production schedule at the Broadmeadows assembly plant and the Geelong engine plant to “balance out our inventories”.

“We are working three days per week for the first three weeks but will return to full production in the last week of March, ahead of the introduction of the new Territory,” Ms McAlary said.

She confirmed both the Broadmeadows assembly and Geelong engine plants would down tools for six days this month, but insisted the casting plant in Geelong would not be affected to the same degree.

“This does affect both Broadmeadows and Geelong but somewhat differently,” Ms McAlary said.“The engine plant and casting plant usually work ahead of the manufacturing plant so their down days are sometimes different, and the casting plant often isn't affected at all.”

She said employees would be paid either 50 or 60 percent of their usual pay for the non-production days, and were able to use annual leave and other entitlements to top this up if they wished.

Sales of Ford’s locally manufactured vehicles in January and February of this year were at their lowest levels in more than 13 years (which is as far back as the data available to us goes).

In the first two months of 2011, Ford sold 5251 locally manufactured vehicles, down 31 percent compared with 2010’s figure of 7612.

Sales of Falcon have decreased 43.5 percent compared with 2010 (2729 vs 4832). Falcon Ute has dropped 13.8 percent (1070 vs 1241) while Territory is down 5.7 percent (1452 vs 1539).

Despite the decline, the Territory is actually performing above average in the medium SUV segment, which is down 7.1 percent so far in 2011.

Falcon sedan sales are almost 20 percent off the pace in the large car segment, which has decreased 23.6 percent compared with 2010, while the Falcon ute is only 1.9 percent adrift of the average 11.9 percent decline in the 4x2 pick-up segment.

Unlike this time last year, Ford currently does not offer a Falcon LPG model or the V8-powered XR8. The Falcon wagon was also discontinued around the middle of 2010.

Ford Australia expects sales of both Falcon and Territory to increase this year as both models get significant upgrades.

The Falcon will benefit from a facelift in the second half of the year, which will be its first major revision since the launch of the FG in February 2008.

The new LPI LPG system will enter production around the middle of the year (expected to increase sales volume by around 20 percent) and the heavily hyped four-cylinder EcoBoost engine will join the range in the fourth quarter of 2011, potentially giving Ford Australia a new fuel-efficient favourite among fleet buyers.

The new Territory will go on sale next month with significantly refreshed styling and a new 2.7-litre V6 diesel engine – both factors that should increase its popularity.

Ford Australia’s total sales have increased 1.0 percent for the year, compared with the industry average 1.7 percent decline.

Every single vehicle that Ford Australia imports has enjoyed a growth in sales this year, led by the Fiesta, Focus and Ranger 4x4, and supported by Mondeo and Escape.

The remaining 10 months of 2011 and the first half of 2012 is likely to be make or break for Ford’s local manufacturing operations.

If the new locally manufactured products make a comeback and return to more competitive sales levels, they may well lead a revival for the brand.

But if the smaller imports are forced to offset the Falcon and Territory simply to keep Ford Australia’s head above water, its future could be considerably cloudier.