Quantcast
Latest Stories

Ford to close Philippine assembly plant

By

www.ford.com.ph/ photo

MANILA, Philippines—Ford Philippines will shut down its vehicle assembly operations in Sta. Rosa, Laguna, by yearend due mainly to lack of a broad supply base and economies of scale. The closure will result in the loss of 250 jobs.

In a briefing on Wednesday, Ford Motor Co. Asean president Peter Fleet said, however, that the closure of the plant will have “zero impact” on pricing and availability of Ford products and services in the Philippines.

Even as a vehicle importer, the company will in fact continue to invest in terms of resources in its national sales company, Fleet said.

This will include the launches of the all-new Ford Ranger, all-new Ford Focus and the iconic Ford Mustang this year as well as the opening of 12 new Ford dealerships in key locations around the country.

Ford Group Philippines president Randy Krieger added that this decision, part of Ford’s ongoing restructuring of regional manufacturing operations to improve efficiencies and better leverage economies of scale, was made following a comprehensive assessment of opportunities to bring a new product program to the Philippines.

“The biggest issue we face in trying to bring in new investment to the Philippines is the size of the local supply base, which isn’t yet on a scale that makes new investment decisions very straightforward,” Fleet said. “It’s a different question when you bring in a whole new platform into the plant, getting new supplies, with new components. So that’s the biggest issue—the lack of a broad supply base in the Philippines.”

“The second issue is economies of scale, wherein if you look around the world, the way Ford Motor Co. tends to operate is that we really like to manufacture in scale with full integrated manufacturing facilities, which typically would be at a scale of 300,000 units plus, in terms of assembly capacity in any one plant. The plants being built today in China, India and Thailand, all of those plants have the potential of that kind of capacity should we choose to do that. Clearly that’s not practical today in the Philippines,” Fleet pointed out.

Krieger said, “This is a very difficult decision. The company studied every possible scenario and opportunity but we could not make a strong enough business case for future manufacturing.”

The decision will leave the country without a motor vehicle exporter, Krieger said.

According to Fleet, the company has been looking for the past 18 months for new vehicles that could be assembled in the Philippines. However, the lack of scale in terms of supply base and existing facility proved to be the biggest hurdle in the company’s decision to invest further in the Philippines.

Fleet said that the closure of the plant is purely a business decision and does not in any way reflect government issues.

The company said it had exported more than 80,000 vehicles worth $1 billion over to Thailand, Malaysia and Indonesia since 2002.

Ford closed its original Philippine assembly plant in 1983 and reopened a new plant in 1999, citing improved political stability.

Ford invested $270 million in the 36,000 vehicles per year factory. It began its 1999 manufacturing  operations with the 4-door Ford Lynx and continued operations since then with production of the Ford Ranger, Mazda 3, Mazda Tribute, Ford Focus and Ford Escape.—With Agence France Presse and Associated Press


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , ford , motor vehicles , Philippines

  • w33k3nd3r

    Honda’s resale value is much higher than that of Ford’s. One of the reasons why people would rather own a Honda than a Ford.

  • raffyb0i

    Sad….I still love my FoFi though :)



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Napoles surgery in Makati hospital successful
  • Save the queen? Aide takes fall for Enrile, Gigi Reyes
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • A first in a mall: Authentic Greek yogurt–made fresh in front of diners
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Banks allowed to use ‘cloud’
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Believe it or not: Filipinos love US more than Yanks
  • Marketplace