Ford cuts production to three days a week

FORD Australia has cut production at its Victorian factories to three days a week to cope with a backlog of stock after slow sales so far this year.

As rival Holden is picking up the production pace on two shifts at its South Australian factory in advance of the sales launch of the locally made Cruze small car, Ford has sliced six production days out of its schedule this month under the weight of excess stocks of Falcon and Territory.

Year to date, sales of the Falcon sedan – Ford’s top seller in Australia for more than 50 years – are down 43.5 per cent.

Last month, Ford Australia sold 1572 Falcon sedans – a decline of 37.5 per cent on the same month last year – compared with Holden’s 3829 Commodores, a decline of 2.2 per cent.

Sales of the Ford Territory SUV, which is built in the same platform as the Falcon, slipped 10.1 per cent last month, to 779 vehicles. Falcon Ute sales were down 22.4 per cent on February 2010, to 591 units.

Ford’s imported vehicles, such as the Fiesta, Focus, Mondeo and Ranger, have been taking up the slack, putting overall Ford sales up one per cent in the first two months of 2011 compared to the same period last year.

Left: Ford Territory. Below: Ford Falcon.

The production cuts at Ford’s factories at Broadmeadows and Geelong were confirmed to GoAuto by Ford Australia public affairs director Sinead McAlary, who said the company had made some adjustments to the production schedule in March to balance 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,” she said.

Ms McAlary said down days had been scheduled for both the main assembly plant at Broadmeadows and the Geelong engine plant, but the Geelong casting factory was not affected.

“Employees are paid either 60-50 per cent of usual pay for the non-production days, but they are able to use annual leave and other entitlements to top this up if they wish,” she said.

Ford will be hoping that the sales slide of its local vehicles will be reversed by updates in the pipeline for release this year.

The Territory is just weeks away from a facelift that will include its first diesel engine, a 2.7-litre V6 formerly used in Land Rover, Jaguar and Peugeot vehicles made in Europe.

As well, Falcon will get a shot in the arm later in the year with the arrival of the first four-cylinder model powered by Ford’s global EcoBoost petrol engine.

This advanced turbocharged 2.0-litre engine – gradually being rolled out around the world in various Ford, Range Rover and Volvo models – is expected to deliver sharper fuel economy without major performance deficiencies over the current Australian-made 4.0-litre inline six-cylinder petrol engine.

The concern for Ford Australia management is the long downward trend of both the Falcon and the Australian large-car market as a whole.

In the past decade, Falcon sales have slid by half – from 60,000 in 2000 to 29,516 last year.

Against this background, Ford Motor Company is wrestling with a decision on the next Falcon, and, in the longer term, Australian production.