Ford shuts shop across the Tasman

Ford Australia will cease manufacturing operations in Australia from October 2016. That means an end to Falcon and Territory models – and more than 1200 jobs at its Broadmeadows and Geelong facilities.

Ford Australia president and chief executive Bob Graziano made the announcement yesterday, along with the company’s 2012 financial results: a loss of $A141 million, taking its total losses to more than $A600 million in the last five years.

“Over the past few years we have taken significant steps to be profitable and sustainable, including reducing production in November last year,” Mr Graziano says. “But our locally made products continue to be unprofitable while our imported products are profitable.

“We are faced with the fact that our cost structures are uncompetitive. Our costs are double that of Europe and nearly four times that of Ford in Asia.

“Manufacturing for Ford in Australia is not viable in the long term.”

Ford intends to continue the rollout of revised Falcon and Territory models in 2014, as previously announced. However, from October 2016 both nameplates will be retired: Falcon after more than 50 years.

Holden launch also

Ford made its announcement on the morning of Holden’s media launch drive for the new VF Commodore, the first major revision of the car since 2006 and the model on which so much of the brand’s manufacturing viability depends.

Ford claims the timing was coincidental.

Speaking during the VF event, Holden chairman and managing director Mike Devereux asserted that Australian automotive manufacturing could carry on without Ford: “The announcement is a reminder of just how tough it is for manufacturers in Australia.

"But we believe it can survive and has adjusted in large part already given Ford’s relatively low production volumes.”

Australian automotive suppliers have long argued that the industry needs all three manufacturers to survive.

Mr Devereux says that is not necessarily the case and that Holden had a particularly tight and efficient manufacturing chain through its supplier council.

Nor did he think Holden would have to re-evaluate its short-term planning in light of Ford’s decision. “We have a solid plan.”

Holden has an $A275 million subsidy agreement with the Australian government for local production until at least 2022, from two new car lines after VF finishes in 2016. In return, Holden is making an $A1 billion investment in production and securing thousands of jobs.

“The industry needs swift [government] action to make Australia’s auto policy clear, consistent and globally competitive,” Mr Devereux says.