My Google Page Rank

Ford assembly plant to close shop by December

PDFPrintE-mail

American car-maker Ford Motor Co. on Wednesday announced it is closing its assembly plant in the Philippines by December this year, leaving about 250 people jobless.

Peter Fleet, Ford Asean president, who announced the company decision to close its assembly operations, cited poor auto supplier base and lack of economies of scale for the local automotive industry.

"First and foremost, this is a Ford business decision," Fleet said stressing the company's decision did not reflect any government policy, saying they have been happy with the government support to their operations in the country.

According to Fleet, the company had been painstakingly working in the past 18 months to look for vehicle model that could be assembled at its Laguna plant but found no viable plan.

Its Sta. Rosa plant, which has a production capacity of 30,000 units, is only producing a tenth of its total sales in the country with only one model Escape, which has also reached its model life.

"The biggest issue is the size of the local supply base which is not on a scale to make investment straightforward," he said.
He said the 40 percent minimum ASEAN local content cannot be supplied by the Philippine auto parts suppliers but have to be supplied by importing from other ASEAN countries making it unviable.

The second biggest issue is the economies of scale as Ford would like to manufacture scale with full 300,000 assembly capacity like the potentials for its plants in Thailand, India and China.

"Clearly, it is not practical today in the Philippines," he said.
He said its decisions are based on current realities and although have also some future projections just the same they would still have to come up with this decision.

He wished "good luck" to their competitors who still brave doing assembly operations in the Philippines given the current situation.
Ford Philippines managing director Randy Krieger said that the Philippines automotive industry was highly underutilized with capacity utilization of 25 percent.

"That does not make a good business case," said Krieger adding that of the over 130,000 units sold last year only 70,000 units are locally assembled.
"Today's automotive and suppliers in terms of scale do not support a business decision for the Philippines," Fleet said.
"These two issues present the biggest hurdle to move forward,"he said.

While they stressed viability issues, Fleet cannot categorically say whether its Philippine operations have been losing or being subsidized by the overall Ford Group, saying they don't report on a country basis, but rather as a regional group.

The company has been enjoying robust growth in sales and is set to launch three new models in the next three months.
Fleet said they have already informed its employes as there would be about 250 out of 360 who are going to be jobless by end this year. They have also informed government officials of their decision, he said.

If it is any consolation, Fleet promised to bring some of their people to its other operations outside of the Philippines, citing their world class skills. At present, they have 20 people deployed in its various Asian affiliates, he said.

Fleet also announced that they will maintain a wholly-owned Ford distribution arm in the country and plans to double its dealership network to 40 from the current 20.

Fleet emphasized the very supportive government adding they greatly value that but stressed they can no longer operate an assembly here given the two major issues affecting its operations.

Ford closed shop in the 70s when the domestic economy was at its lowest. When it came back in 1998, they were very ambitious and were the country's only volume exporter of completely built up vehicles. It enjoyed all the government perks entitled to a motor vehicle assembler.
When it announced a decision to leave the Philippines again, the scenario this time was so much different than it was the first time they left the country.

This time, the automotive is very upbeat. The industry just came up with a roadmap that paints a rosy scenario for automotive manufacturing in the country and as hub for auto parts exports. The initial roadmap projects a tripling of the current 160,000 unit domestic market by 2020.
Fleet, however, said they made some future projections but just the same they had to make this decision.

Fleet said they had a decommissioning plan for the Sta. Rosa plant following a standard operating procedure for facilities they had shutdown.
Ford placed its total investments at its 21.4 hectare Sta. Rosa plant at US$ 270 million. Its exported over 80,000 CBU packs valued US$ 1 billion. The plant saw the assembly of three models Mazda3, Ford Focus and Ford Escape.

by: PNA




Related news items:
Newer news items:
Older news items:

Add comment


Security code
Refresh

Chides Magdalo men for being ‘cowards’

24 Mar 2017 Hits:81 Be the first to comment!

President Rodrigo Duterte on Monday branded Vice President Leni Robredo as an enemy who was in a hurry to claim the presidency and described Senator Antonio Trillanes IV as “a barking dog” who turned out to be a coward. Speaking before the Filipino community in Nay Pyi Taw, Myanmar on Sunday night, Duterte tore into his critics. “Ang mga kalaban ko ... si Leni apurado masyadong maging presidente [Among my enemies, Leni (Robredo) is in too much of a hurry to become president],” Duterte said. Duterte also mocked Senators Trillanes and Magdalo Rep. Gary Alejano, who filed an impeachment complaint against the President. Duterte said Trillanes robbed a hotel during the Manila Peninsula takeover in 2007. “Look at them. Trillanes is a barking dog. He’s [...] Read more

Prev Next Page:

Globe equips Manila Science HS with 21st Century classroom

24 Mar 2017 Hits:57 Be the first to comment!

Globe Telecom and Habitat for Humanity officially turned over to Manila Science High School (MaSci) over the weekend a multifunctional Information and Communications Technology (ICT) laboratory with a collaborative working [...] Read more


WestMinCom troops honor fallen marine soldier

24 Mar 2017 Hits:64 Be the first to comment!

A fallen soldier from the Marine Battalion Landing Team (MBLT)-2, who was killed during a clash with communist rebels, was honored in a send-off ceremony before he was brought to [...] Read more


Six alleged drug pushers arrested

24 Mar 2017 Hits:58 Be the first to comment!

Six persons, including a minor, were arrested in a series of buy-bust operations conducted by the different police stations of the Zamboanga City Police Office (ZCPO), Wednesday. The Drug Enforcement Team [...] Read more


MGB-9 orders stoppage of illegal gold mining in Baliguian town

23 Mar 2017 Hits:59 Be the first to comment!

Local small-scale miners looking for gold ores were ordered to stop illegal mining activities in Pigbogololan area in the rural town of Baliguian, Zamboanga del Norte early this month after [...] Read more


Globe myBusiness gives tips to working in the comfort of your own home

23 Mar 2017 Hits:67 Be the first to comment!

Many business owners enjoy working from home, but there’s a challenge that automatically comes with it.  There are certainly many perks, like being in charge of your own time, dressing [...] Read more


Cocolisap funds await PCA, City Hall coordination gab

22 Mar 2017 Hits:64 Be the first to comment!

Funds to rehabilitate the coconut industry following the cocolisap devastation cannot be released as of yet until after the Philippine Coconut Authority (PCA) regional office 9 and the city government [...] Read more


Koko sees okay of free internet access, six key bills this year

22 Mar 2017 Hits:102 Be the first to comment!

Senate President Aquilino “Koko” Pimentel III said Congress is expected to approve this year the bill on free internet access in all public places and six other key priority measures [...] Read more


Ateneo shines anew in Physician Licensure Exam

22 Mar 2017 Hits:107 Be the first to comment!

The Ateneo de Zamboanga University School of Medicine (ADZU-SOM) once again came up with an impressive performance during the recent Physician Licensure Examination (PLE) given by the Board of Medicine [...] Read more


Globe At Home Customers Meet the Cast of Wicked

21 Mar 2017 Hits:74 Be the first to comment!

The year is just beginning, but one of the highlights of 2017 is the staging of the Wicked, the West End musical, which transformed the Theatre at Solaire into the [...] Read more


Zambo harvests 80 gold medals in ZPRAA

21 Mar 2017 Hits:91 Be the first to comment!

The Zamboanga delegation ranked second in the secondary level and third in the elementary level in the recently concluded Zamboanga Peninsula Regional Athletic Association (ZPRAA) meet held in Dipolog City [...] Read more


Lamitan in state of calamity

18 Mar 2017 Hits:142 Be the first to comment!

The city council of Lamitan, last Wednesday, declared a state of calamity in the entire city. Vice Mayor Roderick Furigay said, the City Council concurred with the request of the barangay [...] Read more


Double barrel reloaded nets four more

18 Mar 2017 Hits:129 Be the first to comment!

Four more suspected drug pushers were arrested in another Project Double Barrel-Reloaded operation in Zamboanga City, last Thursday. Arrested were Gilbert Johnston y Dagoy, 48, single, of Sitio Lantawan, Barangay Pasonanca; [...] Read more


SSS releases March differential of P1,000 additional benefit

17 Mar 2017 Hits:121 Be the first to comment!

The state-run Social Security System on Thursday said it has already released about P2.1 billion to its partner banks for the release of the last tranche of the retroactive P1,000 [...] Read more


Aboitiz, DTI partner anew for Matigsalug livelihood project

16 Mar 2017 Hits:116 Be the first to comment!

AboitizPower subsidiary Therma South, Inc. (TSI) in partnership with Aboitiz Foundation, Inc. (AFI), has tied up with the Department of Trade and Industry (DTI) 11 to implement a comprehensive crafts [...] Read more


6th InfoCar meets with 100 IDPs

16 Mar 2017 Hits:102 Be the first to comment!

Some 100 internally displaced persons (IDPs) met with local and government agencies for a half-day engagement to discuss the progress and developments of the City’s rehabilitation and recovery efforts. Spearheaded by [...] Read more


Forwarding company robbed

15 Mar 2017 Hits:122 Be the first to comment!

The office of a forwarder company was robbed by unidentified burglars who carted away computer accessories, bank checks and cash. Police Station 11 report showed that the officer-in-charge of the Overseas [...] Read more


PAGASA forecasts late El Niño

14 Mar 2017 Hits:156 Be the first to comment!

The Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) forecasts the probability of El Niño in the country sometime in the later quarters of 2017. Chief Meteorological Officer Maribel G. Enriquez [...] Read more


NGCP launches program for aspiring transmission line personnel

14 Mar 2017 Hits:116 Be the first to comment!

System operator and transmission service provider, NGCP, formally introduces the Line Ranger School, a program that seeks young individuals who want to become the new generation of transmission line experts. During [...] Read more