Manufacturing decline not always as analysed

Posted on June 18th, 2016 in Economy,Ford,Holden,Mitsubishi,Opinion,Toyota by Julian Edgar

I have just finished reading a book on the manufacturing decline that has occurred over the last 60-odd years in the UK. It’s called The Slow Death of British Industry and is subtitled A Sixty Year Suicide 1952 – 2012. It covers, decade by decade and industry by industry, the decay in making things in what was once a great manufacturing country.

The industries it covers include car manufacture, ship building, aircraft design and construction – and also more obscure industries like pharmaceuticals. It describes the companies that fell by the wayside, were absorbed by others, or ended up being split into so many entities that their whole reason for existence simply disappeared…

Companies like Dorman Long (builder of the Sydney Harbour Bridge), Parsons (the inventers of the steam turbine) – and car brands like Wolseley, Triumph and Jowett.

The book catalogues in excruciating detail the union bloody-mindedness, the inept management, the worthless interventions of government, the confusion in direction and execution.

And visiting Britain’s wonderful technological museums (as I have done) where you can see Concorde; the SR.N4 hovercraft; the remains of one of the crashed Comets; the beautiful Jaguar E-type; the fastest steam locomotive in the world (the Mallard); the world’s first code-breaking electronic computers; the Sinclair electronic calculator – it makes this whole story of UK manufacturing success and decline come alive.

But there are some things missing in the analysis. They’re the same things missing in many analyses that occur here in Australia of our similar (but smaller scale) decline in domestic manufacturing.

Firstly, quoting massive reductions in the share of employment that manufacturing comprises in the economy is to miss the point that such changes have occurred in all first world countries. For example, that’s the even the case in countries like Germany and France that are often cited as manufacturing powerhouses we should be emulating.

In much the same way as primary industry (farming and mining) once dominated employment, these days, tertiary (service-based) industries now create most employment. That decline in the share of employment held in manufacturing jobs is exactly what you’d expect with greater mechanisation, use of robotics and so on. We wouldn’t want to be hand-building all our cars, one at a time, as was once done. Productivity would be terrible and cars would be unaffordable. So, of course machines will replace people, manufacturing productivity will improve and employment in the sector will decrease as a proportion of total employment.

Secondly, ignored is that the decline in local manufacturing is based entirely on a reduction in demand for those goods. If the pubic, the buyers, choose not to buy locally made goods – and instead buy imports – then of course (unless they are competitive in exports), local manufacture will decline.

In other words, to be brutal about it, uncompetitive domestic companies go broke. They may be uncompetitive in technology, in branding, in price, in innovation – in all cases, consumers vote with their wallets.

So we hold a major collective responsibility for manufacturing in our country declining. The person who blames the Federal Government of Australia for the loss of car manufacturing in this country – that is, the loss of Toyota, Ford and Holden – often has a Nissan Patrol in their driveway, or a Honda, or a BMW. The person who complains that the last Australian-built washing machine recently came off the production line is the same person who has never bought an Australian-made washing machine.

Thirdly, and as an extension of this idea, globalisation, free trade agreements and geographical shrinking of the world through information technology has increased the flexibility with which consumers can make choices. I source electronic modules on eBay from China; they’re bought from either the manufacturer or wholesaler of these products. I can remember when some such modules, able to be sourced only from local retailers, cost me over ten times as much and would take a month to be delivered.

I can very much empathise on a technological history level with the loss of once great companies, once great manufacturing enterprises.

But that’s a completely different perspective from saying that we should all have paid more for inferior goods– and so on a societal level have had a lower standard of living – to prop up manufacturing companies that had become uncompetitive.

I think that in the future, commentaries on the decline of manufacturing will appear to be as relevant as those that bemoan the fact that most people no longer till farms for a living.



The Falcon to die

Posted on May 28th, 2013 in Automotive News,Driving Emotion,Ford,Opinion by Julian Edgar

If you follow cars in Australia, I am sure that you have heard the news. Ford has decided to stop building cars here, and unless there is a radical change of mind, production of the Falcon will stop within a few years.

This has occurred primarily because of dwindling sales of the Falcon – a car that went from selling around 75,000 units per year in 2002 to about 12,000 in 2012.

That is a tragedy: a tragedy for the workers directly employed by Ford, and also for the workers of supply companies that will now likely go broke. It is also sad for the country as a whole: having the capability to design and manufacture as complex an item as a complete car is not to be sneezed at.

But it is also the outcome of a bunch of utterly stupid management and product planning decisions made by Ford itself. For all the talk of high wages, the value of the Australian dollar and the like, no one should refrain from looking hard at what Ford in Australia chose to spend their money on.

The FG Falcon, released in April 2008, was a car characterised by utterly misplaced priorities, to an extent that was staggering then and remains staggering in retrospect. In 2008, the downwards trend in Falcon sales had been in place for four years. People were moving from the Falcon to smaller cars – or, conversely, to large and multi-purpose four-wheel drives.  Social and engineering change in the world of cars was profound: the Prius had been on sale for nearly a decade; fuel prices were only going to keep on rising; and people were looking for flexibility in their cars – the ability to carry five people one day, and then carry big items home from the hardware store the next. All of this was obvious… but not to Ford.

The day after the FG Falcon was released, I wrote in this publication:

It’s very hard to believe that the Falcon will not go the way of the Mitsubishi 380 – and for much the same reasons. High quality engineering directed in completely the wrong direction, aiming at a target that started to move a decade ago and has now gone…

After driving the car we published these notes:

Feels very much like Mitsubishi 380 in that the FG is a car that with exception of some minor electronics, could have been released a decade ago – nothing special in performance/economy, interior space utilisation, interior design, styling (inside and out). Highly competent car but at the things (eg handling, long distance cruising, NVH) that are not a priority for most people.

A ‘nothing’ car in terms of progress. Feels like design priorities were set for what would work in mid Nineties – RWD handling, long distance Australian road travel, inoffensive (and unexciting) conventional styling inside and out. Needs – far better fuel economy option (eg diesel, LPG on downsized engine), much better interior design (literally zero progress made here!), better centre dash ergonomics.

My summary in a full road test of the car was:

With the exception of crash safety and the electronic stability control system, the FG Falcon reflects the design priorities of a different era. In short, Ford apparently believes balls-to-the-wall handling to be more important than fuel economy, and in-cabin styling to be more important than practicality. Simply, the money could have been much better spent.

New engine options – including possibly a diesel – are apparently coming, but as the car stands right now, it’s the epitome of a botched opportunity.

Of course, the diesel never came. Instead, we had that Ford choosing to sell the car with an engine range that included two high performance, thirsty engines – a V8 and turbo six.

One hi-po engine – sure. But two? What did they think this was, the 1980s?

And the issue with wasting internal resources like this is that those dollars could have been put into something else – like fitting a four cylinder. It took until 2012 to do that…

In a column written in December 2009, under the heading of ‘Making very bad product planning decisions’ I said:

The car that this year amazed me the most was the Ford FG Falcon.

The model that I would think sells the best – the XR6 – was incredibly off the pace in the things that matter to most purchasers. All I can say is: what on earth was Ford thinking when they set the priorities?

But to be honest, I could not – and still cannot – believe how bad the FG Falcon is…. and ‘bad’ in the context of what the car is supposed to achieve.

Why on earth did the company spend lots of money on a new front suspension design and steering when out on the road, pushing the car to anywhere near its very high limits is illegal? To put this another way, in virtually all road use, what was wrong with the previous model’s suspension?

That (rumoured) $100 million spent on the new front suspension could have been used to make the air conditioning actually work and improve interior packaging – both would have had far more positive impact on potential purchasers than getting better turn-in at 150 km/h…

And the fuel consumption!

Forget the official government test figures: at a measured 12.5 – 13.5 litres/100km in the city, there appears to be no real-world improvement in a decade. That is simply unforgiveable.

The Falcon angers and frustrates me. The decisions that Ford’s myopic product planners took, in the face of overwhelming worldwide evidence, has cost this country – and Ford – a lot of jobs and money.

At the time these words were being published, our comments section (which unfortunately is not currently visible) was full of people saying how wrong I was.

The automotive journalists in Australia – every darn one of them – said how great the car was. Other than AutoSpeed, not a single publication suggested that the car was utterly wrong for the time and would be a flop – probably sending Ford under in terms of manufacturing in this country. “FG Falcon stuns” read one media test headline. Stuns for what – its inept direction? No, the test didn’t actually say that…

In fact, I was so amazed by the lack of criticism of Ford’s approach with the FG that I wrote a bitterly ironic column with the sole focus being how stupid the decisions underpinning the FG were. I called the Falcon The Ideal Car for the Times.

So why did Ford chose to make the decisions it did?

We will probably never know…. those who set the direction are hardly likely to confess – let alone, try to justify what they did. And sure, Ford was working within tight limitations regarding money and resources – but that just made it even more important that those product planning and engineering decisions showed an understanding of a changing car buying market – not to mention societal change on a broader scale.

But I honestly feel more depressed about it all than triumphant. I am sad to see part of Australia’s engineering and industrial heritage disappear…and once it has gone, you can be certain it will never come back.

Clock ticking for Falcon

Posted on February 26th, 2009 in Ford,Opinion by Julian Edgar

Hastened by the current world financial crisis and its effects on (particularly) US car makers, there is growing discussion in this country about the demise of the Ford Falcon model.

What to many people was unthinkable even only a year or two ago is now becoming an ‘it’ll probably happen’ scenario that while not palatable, is at least open for discussion.

Books to read

Posted on January 8th, 2009 in books,Ford by Julian Edgar

It’s been said that the victors write history. It’s also the case that history tends to be written in the native language of the country – or company. Perhaps it’s for those reasons that good histories of the major Japanese car makers seem so absent – or, when they do appear, are rather lame.

Honda Motor – the Men, the Management, the Machines was written by Tetsuo Sakiya in 1982. When I came across it, the age of the book didn’t worry me – surely all the foundations of the company were in place by then – so it was a read I was looking forward to.

However, the promise isn’t fulfilled. Basically, it’s because the author feels the necessity to wander off into prolonged diversions on Japanese history, culture, labour practices, emancipation of women, trading companies, the role of government – and God knows what else.

Making very bad product planning decisions

Posted on December 16th, 2008 in AutoSpeed,Driving Emotion,Ford,Opinion by Julian Edgar

This is the last blog post for this year, and this week’s edition of AutoSpeed is the last until January 6.

It’s been an interesting year, not least because in response to reader requests, we’ve been again testing more new cars.

I’ve said it before and I’ll say it again – I think that when testing cars, nearly all journalists are way too soft in their criticisms. I mean, to make just a simple point – by definition, half of all new cars should be rated below average and half should be above average.

But read most car tests and you’ll find that nearly all cars are said to be way above average!

I also think that journalists – and especially enthusiasts’ magazines and TV shows – need to in part be blamed for the absurd direction that some manufacturers have taken with their cars.

The car that this year amazed me the most was the Ford FG Falcon.

The model that I would think sells the best – the XR6 – was incredibly off the pace in the things that matter to most purchasers. All I can say is: what on earth was Ford thinking when they set the priorities?

I wrote about this when the car was first released – see The New Falcon – Mostly Irrelevant and the ironic The Ideal Car for the Times – but the car’s reality was even worse than I’d guessed.

Initial thoughts on driving the FG Falcon XR6

Posted on November 6th, 2008 in Driving Emotion,Ford,Opinion by Julian Edgar

Day #1, Urban

Power steering heavy, good (apparently variable) ratio, good feel

Suspension gives firmly damped ride

NVH very good

Performance at full throttle nothing special – air con switches off at merest hint of lots of throttle and seems to stay off for a long time (relatively speaking eg 5 secs)

Cabin feels surprisingly enclosing, not spacious – cf colours of trims, width at driver’s knee level poor, distance between back seat and rear of centre console poor

Speedo and tacho have stupidly fussy markings + silly ‘XR6’ colouring

Central instrument panel LCD is model of clarity – good range of selectable options, including digital speedo

I-phone connectivity (including charging) but no on-LCD display of tracks, etc

Around town fuel consumption with air con on – 12.5 – 13.5 litres/100km – this is progress?

The giants finally stir

Posted on May 21st, 2008 in diesel,Driving Emotion,Economy,Ford,Holden,Mitsubishi,Opinion,Toyota by Julian Edgar

In August last year I wrote:

Read it again.

Less than a year later:

–  Mitsubishi manufacturing in Australia has gone broke

– Holden has said that within 2 years it will release diesel, hybrid and possibly four cylinder turbo versions of the Commodore. The company may also build smaller cars in Australia.

– Ford has released a ‘going on as the same’ FG Falcon, and then – oops, gosh, the world has changed! – announced a diesel engine version within 2 years.

– Toyota has said that they’re eager to build a Camry hybrid in Australia.

I wrote then :

The local manufacturers – especially Holden and Ford – need to show with locally developed product in the showroom that they can produce cars that appeal to more than Ford/Holden performance car enthusiasts, that they not only understand but also actively embrace the significant social change that is now occurring. Otherwise the Australian car will continue down the road to anachronistic irrelevance – it’s already on that path and accelerating as fast as its powerful and thirsty engine can take it….

At last, at last, Holden and Ford are stirring. Hopefully it won’t be too late.

Your Favourite Car Maker

Posted on May 8th, 2008 in Driving Emotion,Ford,Honda,Makes & Models,Mitsubishi,Opinion,Toyota by Julian Edgar

The other day, on learning that I am an automotive journalist, someone asked me what is my favourite make of car.

I must admit the question rather stumped me. It did so for two reasons: firstly, I can’t see how any impartial automotive journalist could ever admit to having a favourite amongst car brands, and secondly, I am not even sure how anyone can logically have a favourite car maker.

I’ve owned cars made by Alfa Romeo, Audi, Austin, BMW, Daihatsu, Holden, Honda, Rover, Saab, Subaru, Toyota – and many others. I’ve driven cars ranging from Rolls Royce to Porsche to Ferrari. I’ve also driven many Mazdas, Mitsubishis, Volkswagens – and so on.

And really, despite brands developing their images based on specific advertised criteria, I have to say that the idea that certain brands have certain attributes is largely a myth.

The core design principle of kinetic design…

Posted on April 29th, 2008 in Driving Emotion,Ford,Holden,Opinion by Julian Edgar

Back when the Holden VE Commodore was released, I was very disappointed that styling clearly dominated engineering in a way that I thought reflected the worst excesses of the past.

I wrote:

Quoted in Go-Auto E-News, designer Mike Simcoe had this to say about the exterior:

“It’s good, confident design. It’s well proportioned and it pushes quality to a level that we’ve never seen before. The interior package for VT was king of that in the market here – and this car continues that. The volume efficiency of the package – that’s the exterior volume to interior size – is just as aggressive as VT was. We made a big song and dance back then about that. And this car is the same.

“The track is a little bit wider with this new architecture, so from the ground up we’ve been able to put the wheels wider on the car.

“It’s an international design. You can’t say ‘European’ any more, because there’s no ‘European design’, or ‘Japanese design’ – it’s a truly international design in its form language. It’s genuinely a rear-wheel drive proportioned car which is something we hadn’t been able to push as hard in the past. And it’s much more formal. The form language that’s on the car is internal Holden. We’ve been trying to do something like this seriously for a long time.”

The Ideal Car for the Times

Posted on April 14th, 2008 in Driving Emotion,Ford,Opinion by Julian Edgar

The tipping point came when Al Gore released his new documentary: I Was Wrong. Completely repudiating An Inconvenient Truth, Gore showed in minute detail how flawed his previous views were.

The world was not actually warming, he noted,  instead it was cooling – and cooling in a way that was very likely to result in greater crop yields, more favourable rainfall patterns and political stability.

And the cause? From his documentary we learned for the first time that CO2 was proving in fact to be hugely beneficial. The greater CO2 concentrations in the atmosphere were counteracting the altered reflectivity of Earth’s surface caused by widespread urban development and farming practices.