Ford output shows how far it's fallen
Lowest production here in 40 years
GREG KEENAN
From Thursday's Globe and Mail
For the first time since 1961, Ford Motor Co. of Canada Ltd. produced fewer vehicles than it sold last year, a development that illustrates how far the auto maker has fallen from the days when it was one of the top producers in Canada.
Ford Canada sold 229,316 vehicles last year for its best sales performance since 2003, but built just 196,374 vehicles at two assembly plants -- its lowest output in more than 40 years.
"That's incredible," Canadian Auto Workers union president Buzz Hargrove said when informed of the numbers yesterday.
As recently as 1985, the company cranked out one of every three vehicles in Canada, but that declined last year to less than one in 10, with its output representing just 8 per cent of Canadian production.
Ford was barely able to hold fifth place among six manufacturers in Canada -- rolling out just 46 more vehicles than Cami Automotive Inc., a General Motors Corp.-Suzuki Motor Corp. joint venture in Ingersoll, Ont.
"When Ford, which historically has been so central to the Canadian economy and the Canadian automotive industry, is lagging behind or tied with Cami, it does send a bit of a warning . . . certainly for the American-based side of the industry," said Dimitry Anastakis, a professor at Trent University in Peterborough, Ont., who has written a book on the 1965 Canada-U.S. auto pact and also studied Ford's history of more than 100 years in Canada.
In the 1920s and '30s, Mr. Anastakis noted, Ford was the largest vehicle maker in Canada, ahead of GM.
GM has been No. 1 in Canada for more than half a century.
Based on last year's production, Ford would not have met the requirements of the auto pact if that policy guideline had still been in place.
The drop in output at Ford Canada is a symptom of the troubles afflicting its parent, Ford Motor Co., which lost $7.2-billion (U.S.) in the first nine months of 2006 and is projecting more losses for the next two years, plus a cash burn of $17-billion before returning to profitability in 2009.
Sales of minivans made in Oakville, Ont., plunged, while sedans and police cars made in St. Thomas, Ont., slumped in the U.S. market, the destination for about 80 per cent of what the plants manufacture.
Production of two new crossover utility vehicles in Oakville didn't reach full speed until December.
Output of those models -- the Ford Edge and Lincoln MKX -- should help restore production to higher levels this year, Ford Canada president Bill Osborne said in an interview last week in Detroit.
"The early indications are very strong," Mr. Osborne said.
"We think it's a vehicle that fits very well with consumers who have traditionally been buying Explorers and minivans."
Mr. Hargrove agreed, pointing out that Ford hopes to produce as many as 330,000 vehicles annually at its $1-billion (Canadian) flexible plant in Oakville.
But the St. Thomas plant is scheduled to cut one shift of production this spring and is still under threat of closing permanently as part of Ford's restructuring plan, which includes the shutdown of seven assembly plants. Only five of those seven plants have been identified.
In a speech at an industry conference in Detroit yesterday, Mr. Hargrove lamented the "crisis" facing his members and North American producers and called for a continental auto pact that would require manufacturers selling vehicles in Canada, the United States or Mexico to assemble more of them in the three countries.
Under his proposal, the NAFTA countries would negotiate a separate agreement with countries in Asia that would require Japan, South Korea, China and others to open their markets to more North American-made vehicles.
"In the case of Japan, that would mean more vehicles imported from North America, additional plants here to replace imports or some effective combination of the two that would balance trade and investment," he said.
He added in an interview that he raises the trade issue with executives of the Detroit Three every time he meets with them.
"In my mind, they've made two decisions," he said.
"One is that Japan's a hopeless case -- it's not worth the effort and the money to try to get in there -- and two, that their response to it is going to be to move more to Asia and Eastern Europe and Latin America."
Ford's share of vehicle production in Canada is shrinking
Canadian production and Ford's share of Canadian production.
Total for Ford
1965: 25%
1985: 34%
1999: 22%
2006: 8%
SOURCES: WARD'S AUTO WORLD AND DesROSIERS AUTOMOTIVE CONSULTANTS INC.
