Hot on the heels of announcements of the hero car arm's best-ever sales performance, it was not only the extent of the sackings that shocked industry observers (and the unsuspecting FPV team), but the way in which 49 per cent minority partner Ford Australia also appeared to be caught off-guard.
When it would have made sense to present the changes as a united and carefully-planned restructure via a joint Prodrive-Ford Oz announcement, CarPoint believes that the sackings are indicative of Prodrive's decision to react decisively and publicly to Ford's Falcon-based new product hiatus and what it sees as an unfair burden of product development cost and responsibility.
Reduced Falcon and Territory production, Ford's 'holding pattern' marketing and systemic delays in getting the critical new Orion [Falcon replacement] into production -- a sequence of events which date back to the unsuccessful AU Falcon -- have not been well received at Prodrive's UK HQ either.
Indeed, there are a number of factors that have likely have contributed to Prodrive's decision to cut costs (and more) in such a drastic and public manner. And many of these date back some time. Consider…
>> FPV achieved its 7000th sale in January 2007. This represents unprecedented sales growth in the less than four years since the first FPV GT went on sale. HSV took four years to build its first 5000 cars. FPV's record 2144 sales in 2006 is a ten-fold increase over most Tickford models that preceded the FPV range. However, this success may have come at an unsustainable cost to Prodrive.
>> During a period that Ford has done very little to change the appearance of the BA Falcon since its launch in late 2002, Prodrive has been forced to go it alone in developing new styling and ongoing appearance changes to maintain interest in its performance car range. FPV has also developed several costly new models at a time that Ford's Falcon range has remained static. Last Friday's abolition of FPV staff who implemented this process appears to make a strong statement.
>> The Prodrive engineering arm which undertook development work for Ford including the XR6 Turbo and Territory Turbo and FPV had duplicate, independent management structures. This left David Flint in charge of FPV during the transition from Tickford to FPV.
Following David Flint's retirement during 2006, there was no reason to continue these parallel business structures. CarPoint believes that a high priority of these latest moves is to consolidate these two Ford-oriented Prodrive divisions into a single management and financial structure. Although this would normally make sense, the recent recruitment then sacking of key FPV staff doesn't. CarPoint believes that the FPV operation may have been healthy on its own but the combined bottom line for both operations may have forced Prodrive to make staff cuts where they generated the least impact on short term revenue.
>> In the absence of a suitable US V8 engine to match HSV's V8 engines from the latest Corvette range, Prodrive was forced to build its own Boss V8 engine in Australia before it could launch the FPV GT. The viability of this process depended on sizeable XR8 orders from Ford.
Despite the arrival of a heavily upgraded L76-powered VZ SS and an all new L98-powered VE SS from Holden since the XR8's launch, Ford Australia has left the XR8 specification virtually as it appeared in 2002 with a predictable decline in sales. When XR8 improvements have not kept pace with FPV's own range or its Holden rival, Boss engine viability was always a financial time bomb for Prodrive as it is fundamental to FPV's survival but not Ford's.
Ford's recent Falcon production cutbacks in addition to the XR8's decline, may have finally lit the fuse and forced Prodrive to act.
>> CarPoint understands that the special Limited Edition models of the current FPV GT range intended to celebrate the GT's 40 year anniversary in 2007 were locked in before Friday's retrenchments. The retrenched staff have also completed the coming FPV range based on the Orion. With so little for FPV to market and present to the media over the next 18 months until the arrival of the Orion range, Prodrive may simply have decided to follow Ford's lead, trim its workforce and leave a skeleton workforce in place to handle sales and merchandise.
>> At the launch of HSV's new E series range, it was clear that HSV management were sweating over the acceptance of the new range after it represented the biggest development investment in HSV history. This was despite the outlook of strong export sales which are not yet a given in FPV's case.
Before Prodrive can match E-series investment in the next generation of FPV models, CarPoint understands that Prodrive will need to carry the additional investment in sourcing or developing a V8 engine that will not only take the battle to the HSV range but outrun Holden's mainstream VE SS range which currently outperforms FPV's V8 models.
Since 1999, not only has HSV enjoyed the financial benefits of picking up the latest high performance V8 crate engine from the Corvette C5 and C6 generations, it has piggybacked Holden's commitment to the V8 engine which resulted in a complete re-engineering of the Commodore engine bay from 1997. Prodrive was forced to squeeze the Boss V8 into a BA engine bay originally intended for the small block Windsor. This required a special bonnet bulge pressing and a compromised engine location. As this is no longer acceptable against the better balanced VE Commodore platform, Prodrive may have been forced to go it alone with a heavily-modified FPV Orion platform for which it has to free-up funding.
>> Ultimately, all of Ford Australia's current problems (and FPV's) can be traced back to 1993, the year that the EF Falcon needed to arrive to do battle against the VR Commodore. Instead, it was delayed until 1994 as vital resources were sidetracked into US plans to close Ford Australia's manufacturing operations and replace the Falcon with the Taurus.
Although this was averted, the EF Falcon could not regain lost sales momentum, a process that was repeated when the AU replacement was a year late in 1998 and needed to offer what the BA did in 2002.
By the time the Orion replacement arrives in 2008, it will be a full two years behind the VE Commodore which is too long in today's volatile market. Prodrive may well have decided that going it alone for 2007 in maintaining a strong FPV profile may be too difficult with little hope of return. Faced with slashing thousands of dollars from unsold stock as HSV did last year, Prodrive may have decided to cut overheads.
>> HSV in its early days was heavily dependent on managing director John Crennan's sales and marketing background backed by John Harvey's feedback in the press, dealer and owner liaison roles to fill in the gaps in product direction. Both exploited strong media and owner interest in the HSV range and the lack of competition without having to invest in specific advertising or marketing.
It is significant that after John Harvey was moved to part-time duties in 2000, HSV waited until 2006 to appoint its first full-time media liaison person on the launch of the E-series. CarPoint believes that today's intense competition from imports and the rivalry between FPV and HSV would not allow a repeat of the early HSV strategy.
One of the key obstacles to early Tickford and FPV success was a British mindset that placed little value on Ford's unique Australian muscle car heritage. Does the latest Prodrive move signal a return to British staff with this mindset?