Future of Ford and Holden Could be Revealed in Detroit this week

[Falc'man]

Originally Posted by Chilliman

I like your thinking

He's given the game away

[jpd80]

Originally Posted by FPV GTHO

Hmm, Ford claim FG was 90% new anyway. What aspects does a vehicle like that still remain viable but a switch in platform doesnt?

There's a difference between 90% changed and 90% new...
It's the bits that changed but weren't new that are the expensive ones,
stuff like power train and electricals, suspension was mostly carry over or
variation of Territory's existing set up.

FoA's issue as i see it is recouping development costs. If it was a global product or one at least funded globally, we would only have to recoup costs of local production and not local development.

On a six year product cycle, the cost of a $600million development is $100 million/year,
divide that by 40,000 sedans and Utes and it's over $2,500 a car for own design.
Now that difference is dependent on the new global car having no local development costs
which is highly unlikely and also the $200 million odd for closing down Geelong engine....

Falcon engine is dirt cheap to source compared to the price of FNA's fully built D35....

[jpd80]

Originally Posted by Falc'man

He's given the game away

That doesn't explain the two own designs FoA is showing Mays in February.
So long as Holden still think we're going FWD, all is good.

[Road_Warrior]

Originally Posted by jpd80

That doesn't explain the two own designs FoA is showing Mays in February.

Makes perfect sense to me at least..??

[bobthebilda]

Originally Posted by jpd80

I don't buy it, not for one minute.
Those very same sales expectations in 2006 also had a huge helping of XT fleet sales,
Falcon also had E-Gas powering along in Sedan and Ute securing around 20-25% of sales
and Territory was barely a couple of years old and still to get the ZF 6-speed auto.
There are very good reasons why Falcon, Ute sales are down, all to do with LPG

Fast forward to 2011:
1) Very shortly we are getting a very fresh Territory with ZF across the board
and a diesel option that set to double Territory sales ... now that's good news.

2) LI LPG falcon engine and Ecoboost I-4 arrive later this year and yes, these
engines will give Falcon Sedan and Ute a real shot in the arm as far as sales go.

3) A couple of years ago, FoA chopped 600 people from the workforce making
the production of Falcon, Ute and Territory super efficient compared to 2006.

With regards a change in platform:
1)Why are we not switching to Taurus, Explorer and next Mondeo inside the next two years?

2) Why are they letting FoA make their own business case with own design future vehicles?


Do not count out Ford Australia, I think you might be very surprised to know
just how costly it would be for them to change from evolving another Falcon
to tearing up supply contracts and adopting Ford's global FWD/AWD vehicles.

Keep the faith.

All you have managed to do is transfer all the optimism from 2006 to now. Unfortunately sometimes potential sales dont always transfer to actual sales.

JPD On a six year product cycle, the cost of a $600million development is $100 million/year,
divide that by 40,000 sedans and Utes and it's over $2,500 a car for own design.

This is not the correct way to look at it. The 600 million in development costs is normally spent up front. If you borrow it at 10%, then after the first year it has cost you 660 million. So after 6 years, your 600 million would have cost you over one billion dollars, or on the other side by not investing that 600 million in the bank, you have lost interest. Thus at 40,000 units a year, the development costs into a car could be nearly double your prediction.

Compare this to a "world car", that gets pumped out at 400,000 units a year with the same development costs, and these costs are reduced to roughly $1600 per car.

Simple fact is, until they can pump out 200,000 Falcons a year, and maybe 100,000 territories a year, they will never be competitive with the rest of the world and their future will always be called into question.

[FPV GTHO]

Ford doesnt have to pay up front with a loan. Territory as an example was funded by Ford Global. Ford are unlikely to charge their own divisions interest.

[Joe5619]

Originally Posted by FPV GTHO

Ford doesnt have to pay up front with a loan. Territory as an example was funded by Ford Global. Ford are unlikely to charge their own divisions interest.

I can tell you right now that is wrong!!! Well, in case of the compnay I work for away.. Our US head office charged us interest..And why won't they, if the US parent company had that money in the bank they would be owning interest which they are missing out on by leading Australia the money.

[Road_Warrior]

Ford Australia does have the benefit of a $900 Million revolving loan from Ford Motor Company, whether the term 'revolving' means they don't pay interest I don't know and I'm not sure if that 900 mill is for product development or company-wide running costs.

From what I can gather, money is not loaned to FoA per se, funds for product development are allocated in Ford's global product development budget as it is after all one company. This is why the regional outposts have to make submissions to HO in Detroit for future product so they will agree to allocate the funds. Kind of like government departments making budget submissions to Treasury for funding to be allocated for XYZ project. It's not loaned to that Department for payback later, its capital expenditure.

[jpd80]

Ford funds it's own projects, the business plan is submitted for approval
and the finance division allocates the cash for the project.

The design and development costs for FG commenced in 2004 and were submitted
for approval half way through in early 2006 and paid out on delivery in 2008.

[FalconXV]

so the question now is, is that going to grind to a halt as part of the One Ford strategy and is Ford Oz going to be on a shorter lead for their own products?

[jpd80]

Originally Posted by FalconXV

so the question now is, is that going to grind to a halt as part of the One Ford strategy and is Ford Oz going to be on a shorter lead for their own products?

Where do you guys get this idea that FoA is a renegade outfit doing its own thing?
FoA has always been on a short lead, for the past 40 years, they have to assess
the suitability of existing global platforms before developing their own design and
when that's done they have to get the proposed platform and business plan approved
by head office. Nothing escapes the the chiefs at head office, every detail checked.
FG Falcon was the most heavily monitored development program ever....

With teleconferences every week two visits by the during development
that sort of thing was totally unheard of with past vehicle developments....

[bobthebilda]

It doesnt matter if Ford australia borrowed the money from an australian bank, if ford US borrowed it from a US bank and then forwarded it to australia, or Ford had surplus cash sitting in the bank earning interest. Money has a cost. That why sometimes you see companies with huge surpluses of cash, sometimes returning the money to shareholders via share buy backs or special dividends. Ford must compete with every other business in the world for shareholders funds (which they get by saying they are going to make certain profits), or they must get loans from a bank (which will accrue interest). Does anyone in the right mind think that shareholders will give Ford money if they wanted to make investments that didnt make money, or banks would lend money to them for the same sort of investments.

The leadership of Ford would have a decent percentage of their income linked to the financial performance of Ford. They are far enough removed from the average worker at Broadmeadows to ensure that many many many interests come before they worry about 30,000 purchasers (or assemblers) of Falcons each year.

[jpd80]

Originally Posted by bobthebilda

Does anyone in the right mind think that shareholders will give Ford money if they wanted to make investments that didnt make money, or banks would lend money to them for the same sort of investments.

Bob, stockholders don't give Ford money anyway, the shares are bought and sold on the
open market and by the way, Ford stock hasn't paid a dividend in the past four years.
What traders are seeking is an increase in the stock price through speculation and
good monthly reports for the past two years or so - that's it.

The only money Ford owes to stock holders is in the form of profits returned after
Ford completes restructuring and pays down its debt - and the reason for that?
The Ford family owns a controlling voting interest through its special B class shares
that have never been diluted since the first float back in 1956.

The leadership of Ford would have a decent percentage of their income linked to the financial performance of Ford. They are far enough removed from the average worker at Broadmeadows to ensure that many many many interests come before they worry about 30,000 purchasers (or assemblers) of Falcons each year.

Only the upper echelon gets anything like the bonuses you're thinking about,
most white collar workers haven't had a raise in the past four years but they do get some small bonuses....

[JPFS1]

[Watto_Cobra]

Can't quite read the state on the plate.

I assume that's in USA?

Shame it's an XT

[My poor XF]

Originally Posted by Watto_Cobra

Can't quite read the state on the plate.

I assume that's in USA?

Shame it's an XT

Looks to be Michigan. Could be wrong though.

[stang65]

Looks like Michigan written on plate.

[Watto_Cobra]

Good call gents, it does look like Michigan.

Can't make it out, is it left of right-hand drive?

I couldn't imagine it being LHD and maybe they don't require signage on the back stating "Caution: RHD vehicle"???

[gokhan]

Definately looks like Michigan (offset to the left too). What's with the exhaust?

[block58]

Originally Posted by Watto_Cobra

Good call gents, it does look like Michigan.

Can't make it out, is it left of right-hand drive?

I couldn't imagine it being LHD and maybe they don't require signage on the back stating "Caution: RHD vehicle"???

You can see the seatbelt on the right hand side being used and can kinda see a silhouette of a person. Weird exhaust it's got.

[My poor XF]

Originally Posted by gokhan

Definately looks like Michigan (offset to the left too). What's with the exhaust?

Looks weird, first thing I noticed about it.

[Road_Warrior]

Watermark that image ASAP before those goons from Caradvice take it.

Interesting exhaust. I'm betting its an Ecoboost validation mule.

[Ford_The_Win]

I saw that pic somewhere a few months ago, nothing new unfortunately.

[Bud Bud]

I don't mind the current Taurus but that FG on U.S. roads looks awesome! It is a pity that it just was not designed to have a home in the U.S. in the first place.

Bud Bud

[JPFS1]

Ford The Win is correct... nothing new, it's from late 2010...

[Road_Warrior]

Originally Posted by JPFS1

Ford The Win is correct... nothing new, it's from late 2010...

This may be the case...however it raises the question in the context of this thread: what was it doing there?

Ford seem VERY keen to see how the I4 Ecoboost will work in a RWD application.

[JPFS1]

Exactly why it's relevant to the thread... Of course it's nothing new to send cars over for evaluation, sign off, crash tests....the lists goes on, but you would expect that if the RWD falcon was about to be thrown off a cliff....you could ask... why?

[Road_Warrior]

Exactly.

My curiosity has also been triggered with FoA's supposed 2 vehicle submission for the global large car design comp. Is it:

FoA covering both bases with a FWD and RWD large car proposal (ie with only one winner); or

FoA making a 2 pronged attack on the segment with a FWD version for fleet and family variants and a RWD for sport and luxury variants (like Lincoln even though that idea seems to have gone quiet now).

Regardless of which one it is, the presence of a Taurus and Ford Fusions in and around Melbourne in 2010 is making much more sense now.

[FalconXV]

I thought I read that the FG platform was LHD capable? I'm pretty sure the dash is symmetrical for that reason.

[jpd80]

Originally Posted by JPFS1

Exactly why it's relevant to the thread... Of course it's nothing new to send cars over for evaluation, sign off, crash tests....the lists goes on, but you would expect that if the RWD falcon was about to be thrown off a cliff....you could ask... why?

Exactly.
Why would Ford bother with significant upgrades and expenditure on the FG if it was a dead end platform?
Why wouldn't they just say, import RHD Taurusssesses if that was all they were ever intending...

Broady and Geelong still have a few tricks to play...