As we reported earlier, Ford announced today that it will cease its Australian manufacturing operations on October 16, 2016, leading to the loss of around 1,200 jobs out of a total of 3,500 people it employs at its production plants at Broadmeadows and Geelong that build the Falcon and the related Territory SUV.
During a press conference held in Melbourne today, Bob Graziano, president and CEO of Ford Australia, said that the company could not continue to build cars in the country after reporting a loss of $141 million after tax in the last financial year, and more than $600 million over the past five years.
Like his counterparts over at Holden, which will likely kill the Commodore in 2016 and put the final nail in the coffin of Australia’s long production-run of rear-wheel drive sedans, utes and estates, Graziano also blamed the rising value of the Australian dollar against other currencies.
“Our costs are double that of Europe and nearly four times Ford in Asia,” said Graziano. “The business case simply did not stack up, leading us to the conclusion that manufacturing is not viable for Ford in Australia in the long-term.”
In a press statement, Ford said: “Australia has annual sales of approximately 1.1 million new vehicles, and customers have access to more than 65 brands and 365 models available for sale. This makes Australia one of the most competitive and crowded automotive markets in the world.”
“Given the fragmented marketplace and the low model volumes that result, we decided that manufacturing locally is no longer viable,” said Graziano.
“Ford vehicles have been part of the automotive landscape in Australia for almost 110 years and we have manufactured here since 1925. We are proud of that history. We are proud of our role in Australia and we haven’t made this decision lightly,” he added.
“Overall, we are changing, but our commitment to Australia remains strong. We’ll move through this transition and continue to be a vibrant and strong part of the Australian driving experience.”
Since 2000, Ford’s Australian division has received some $1.1 billion in state and Federal Government assistance to keep its operations in the country. Just last year, the Victorian government contributed $34 million to a Ford project worth $103 million for the further development of the Falcon and the Territory SUV, with Australia’s Prime Minister Julia Gillard saying at the time that, the grant would help create 300 jobs. However, in November of the same year, Ford sacked 212 employees from its Geelong and Broadmeadows plants.
Ford, which imported its first car in the country in 1904 and began producing the Model T in 1919, said it will continue in Australia as an import-only brand.
“Ford will remain a significant employer in Australia, with more than 1500 team members, as will our network of more than 200 dealers around the country,” said Graziano. “The Australian team’s role as a global centre of excellence for vehicle development also will continue to be an important focus for us.”
The Blue Oval said it will proceed with plans to launch updated versions of the Falcon sedan, Falcon Ute and Territory SUV in 2014, while strengthening its product lineup with a 30 per cent increase in the number of new vehicles offered to Australian customers by 2016. Graziano pointed out that Ford plans to put to rest the Falcon nameplate after production of the rear-wheel drive model ceases in 2016.
Ford’s move to abandon its manufacturing operations in Australia is expected to have a domino effect on the country’s parts industry as well as on the other two brands with local production facilities, GM Holden and Toyota.
Photo Credits: Ford Australia
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