Australians have had a long love affair with the Ford Falcon range.
Australians have had a long love affair with the Ford Falcon range.

Ford Falcon future safe until 2016

THE future of the Ford Falcon has been secured for at least another four years - but the fate of the vehicle beyond that is no clearer.

The Victorian car maker has pledged $103 million - including $34 million in Federal Government funding - to continue building the Falcon until 2016 and upgrade it to meet more stringent emissions standards.

The joint announcement, which also confirmed 300 new jobs as well as the continuation of and upgrades to the Territory SUV, was made at the Detroit motor show overnight.

It came after Federal Minister for Industry, Senator Kim Carr, sealed the deal in a meeting with the global boss of Ford Alan Mulally.

"We had very productive conversations today with the Ford Motor Company ... and the announcement you see today is a reflection of that," Senator Carr said.

"This is a vote of confidence in the future of Ford in Australia. I trust this is a measure to address [concerns about the future of Ford's local manufacturing operations]."

The future of the Falcon has been cast in doubt over the past five years against the backdrop of record-low sales - fewer than 19,000 Falcons were sold last year after a peak of 81,000 in 1995.

Senator Carr said Ford Australia's survival as a manufacturer was crucial to the other two local car makers - Holden and Toyota - and the pool of about 200 suppliers.

"I have never ever conceded anywhere that we could run the Australian automotive industry on the basis of the reduced number of [manufacturers]," Senator Carr said.

Joe Hinrichs, president and CEO Ford Asia-Pacific and Africa operations said: "We continue to invest in Falcon and Territory ... but the speculation about the future impacts our employee morale and impacts, we think, our customers unfortunately.

"In an unprecedented move for us we're talking about a product cycle ... that's beyond the next couple of years to provide some certainty and to remove some of this speculation."

Hinrichs admitted the future of Ford's Broadmeadows and Geelong factories had been under scrutiny; output dropped to just 45,000 vehicles last year (when Falcon, Territory and ute are combined). Most car factories need to run at a minimum of 100,000 vehicles per year to remain viable.

"We wouldn't build a new one ... but when you have an existing [factory] that has the current tooling, that's a different equation," Hinrichs said.

The future of the Falcon and Territory took a turn for the better after Senator Carr after met with Ford's regional executives in Shanghai in August last year.

"Five months ago ... Minister Carr came to visit me in Shanghai, and this [continuation of the Falcon and Territory to 2016] wasn't the plan," Hinrichs said.

Mulally added: "Australia is a really important market to us and we're going to continue to invest."

Ford Australia president and CEO Bob Graziano said confidence had been restored in the Territory since the arrival of the diesel model elevated it to become the country's top-selling SUV. With the addition of the four-cylinder Falcon and better supply of its new LPG system, Graziano said: "I'm very bullish about 2012".

The Victorian Government has also made a contribution, but the amount was not disclosed.

Stephen Biegun, vice president of international government operations for Ford said: "What the Australian government is doing here is very much in line with the exact same conversations we're having with other governments around the world. They want to shore up viable manufacturing in their countries. You cannot have a complete economy if you don't have a commitment to manufacturing, it's essential."

Biegun also said it was impossible to guarantee the future of the Falcon and Territory beyond 2016.

"We would never make a commitment past the next four or five years. It's just not in our vernacular. There are very few absolutes in our industry except that things will change."

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