Ford announces Vic job cuts
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Job losses: Ford says workers at Geelong and Braodmeadows will be affected (ABC: Jonathan Beal, file photo)
Ford plans to axe several hundred jobs at its Geelong and Broadmeadows plants in Victoria.
Ford says 350 jobs, or 15 per cent of the manufacturing workforce, will go.
That is on top of 600 jobs to be scrapped from the company's Geelong engineering plant by 2010.
The move folllows the Bracks review of the car industry, which recommended a halving of tariffs by the same year.
Ford spokeswoman Sinead McAlary has told ABC Radio's AM program the decision is in response to an expected fall in sales.
"Global economic factors around the whole world are starting to affect Australia's car industry," she said.
"We expect there to be a notable softening in new car sales for the rest of the year, and we're taking these actions to strategically position our business to match our production to market demand."
Unions and industry have been calling for a halt in the tariff cut but Federal Industry Minister Kim Carr says the issue of tariffs is not the primary cause of Ford's troubles.
"What we've seen in recent times is that the price of the Australian sedans has increased by about $8,500 as a result of currency movements...whereas the tariff is worth about $600," he said.
"It's quite clear that there are much larger issues at stake here than the tariff.
Mr Carr says other issues such as market access, the industry's export capacity, petrol prices and increasing interest rates have all contributed to difficulties in the industry.
Mr Carr and Prime Minister Kevin Rudd due to meet with head of Ford next Monday.
The Government is yet to respond to the review of the car industry.
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Comments (34)
Comments for this story are closed. No new comments can be added. If you would like to have your say on this issue, you can do so via the Emails section of our Opinion pages.
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dragon:
22 Aug 2008 9:12:12am
There are going to more tough times for this industry.
FoMoCo posted a global loss for the first time in its history this year and industry should have seen this coming. The unfortunately this is where will be more taxpayers money will be needed to prop up this 'icon' industry (see opinion story)Agree (0) Alert moderator
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Truebelieveritus:
22 Aug 2008 9:25:42am
I think there are a lot of comparisons between the Australian car industry and 'Colin' the baby humpback whale.
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Oliver:
22 Aug 2008 9:59:21am
I don't. The government will actually do things to help the car industry survive.
With Colin, they said they did "everything they could" (Iemma). But in reality they could have tried feeding it, whats the worst that could have happened? He could die? They killed him anyway!Agree (0) Alert moderator
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stephen:
22 Aug 2008 10:56:16am
A plea. Put the industry down humanely
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manzp:
22 Aug 2008 9:28:33am
If only they would close down the Americans and Japanese (holden, ford and Mitsubishi) in Australia the Australian car industry would be free from heavy handed import restrictions and we would have better cheaper cars for the entire population as has happened in NZ. Why do we prop up these overseas companies and treat them like they are Australian? For the sake of a loss of a few thousand jobs the millions of car owners could have real choices and potentially save up to tens of thousands of dollars on equivalent cars if they were able to be imported for Japan and other places. The quicker they go the better. Wouldn't you like to be driving a nice 5 year old European car eg BMW 3 series, Audi A4 etc for about $20,000 instead of $35k+?
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Roland:
22 Aug 2008 9:40:26am
Unfortunately no-one has the guts to do it... but then in the short term the few thousands would be in serious strife...
No politician wants that sort of popularity...
Still oh how grand it would be to be able to pick up a generously priced EU car?Agree (0) Alert moderator
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Ben:
22 Aug 2008 9:44:35am
I think you will find it is something like 60,000 people employed in automotive jobs (don't forget the supply chains).
The governments (state and federal) would also be reluctant, lets not forget the taxes they raise from both domestic and imports (this would be a huge hole in any future budget). Also, this will make our trade deficit increase.
Tough decision, should we prop up an industry that isn't competitive? I feel if we don't we may regret it in the future, relying on the natural resources boom puts us in an awkward position for the future should the rest of the world move away from global warming technologies. Definitiely a catch 22 scenario for our state and federal governments.Agree (0) Alert moderator
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Bill Anderson:
22 Aug 2008 11:01:06am
I think the Bracks report put it at about 90,000. Add to this the fact that it is a strategic asset and I think that we are abandoning a very important part of our independance. I have said it before on this comment page. It is dangerous not to have the capacity to make the very machines that make our country one of the most prosperous in the world. As for them being foreign owned, that just means you get to share all that research and development cost with a larger entity like America or Japan. The amount that an Australian company would have to pay for it, instead of riding on the back of a large foreign company would be more than the 600 dollars a car that the tarriff is worth. Most of our competitors are a lot more protectionist about things like this.
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John R:
22 Aug 2008 9:45:38am
We treat them like Australias because they provide jobs in Australia, retain manufacturing expertise in Australia and source their components from Australian companies.
It's all very well observing that we can buy everything from overseas cheaper than we can make it ourselves, but the problem is that if you're forever buying things, but don't have anything to sell yourself, you end up running out of money.
Selling off our resources and land to overseas investors can only buy us so many trinkets before its all gone, and eventually we may need to fall back on making something ourselves. At that point, having the manufacturing and engineering expertise in the country will be helpful.Agree (0) Alert moderator
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dws:
22 Aug 2008 9:51:37am
...why would you buy a 5 year old car without any factory warranty and call it a good thing?. Also parts and labour to fix a 5 year old European car are always a little bit on the high side compared to a locally produced car. People will always like the idea of having something brand new. Australia needs some manufacturing to stay here and the auto industry is very visible to the general public.
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Barry:
22 Aug 2008 10:04:49am
Um, As NZ doesn't have a car manufacturing industry that's a pretty easy statement to make with out backing up the types of vehicle that are imported for use and if memory serves me correct don't NZ import a large percentage of their cars from the very same "Icon" manufacturing plants in Australia you're advocating we close?
As for a few thousand jobs try 120,000 people employed in the industry plus lets not forget the add on industries like parts manufactures whose major orders come from these big "Dinosaurs". If you really want that Audi, great a better paying job (less of them around now), save more (bit hard with the latest tax hikes), salary sacrifice or better yet live with in your means like the rest of us do.Agree (0) Alert moderator
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manzp:
22 Aug 2008 11:00:02am
FYI I already own 2 Audi's outright but I would prefer to have newer ones cheaper when I replace them.
At the end of the day I really don't care if Ford/Holden etc remain, but if they can't be competitive and need the government to prop them up with multi-millions of dollars that is ridiculous. If my business suffers will the government help me? No way!
Keep the manufacturing if you want, but let the doors be opened to imports and let the market decide what is best... It would be akin to natural selection in the animal kingdom.... Let nature run its course.
Drive an Audi some time (2000+ model) and compare it to a commodore/ford.... There is no comparison in build quality, refinement etc. The "Aussie" cars are 10 years behind at least.
Oh I long for the day Audi A4 and BMW 3 series are the same in Australia as the falcon and commodore as they are in Germany.... And no I don't want to move to Germany to get it ;)
If this ever happens parts prices will also come down accordingly, supply and demandAgree (0) Alert moderator
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David:
22 Aug 2008 12:46:04pm
Actually the comparrison with NZ is wrong.
New cars cost as much or more in NZ as they do in Aus. What's gets imported cheaply are the used cars from particularly japn where strict controls mean that it is 10 times more expensive to own a 2 year old car than a new one.
So NZ is flooded with cheap 2year old cars. Sounds great huh. But it also means that there are few new cars bought because your new car will hold little value in its first 2 years.
So NZ is awash with imported 2nd hand cars. Most of which have needed conversions to meet local conditions. These conversions are often dodgy and occasionally dangerous.
Trust me, not such a hot idea!Agree (0) Alert moderator
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GDH:
22 Aug 2008 9:29:39am
I heard the Ford spokesperson AM saying that they plan to begin building a smaller car in Australia by 2011.
I'd say Ford is about 25 -30 years behind the game with an idea like that.Agree (0) Alert moderator
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Ben:
22 Aug 2008 9:59:52am
Large cars typically have a higher return per vehicle sold as opposed to smaller cars. What you have to achieve with small cars is a very large volume to produce the same return on investment for a smaller number of large cars, unfortunately Australia is a small country (population wise) and cannot achieve these volumes with out exporting (and I believe that Ford is producing the Focus for other asia pacific nations). We have seen in the past small cars manufactured in Australia do not last (Nissan was the last to pull out), but with high oil prices large cars are not selling well and unless fuel saving technology can save these cars Australia's obsession for large cars may also be over (but looking at Holdens record V8 sales this may also not be true - it appears the traditional 6 is the one suffering).
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GDH:
22 Aug 2008 11:07:17am
I don't disagree with your Ben. My point is that the small car solution has come and gone. If Ford wants to remain in car manufacture, they should be thinking a little bit more boldly than this, perhaps to a smaller volumne, higher value auto that not just people in Australia, but in other other countries want to buy. There are plenty of car manufacturers in high wage countries like France, Germany, Sweden, Italy etc who have done that and are still making a go of auto manufacturing.
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henry19720:
22 Aug 2008 12:04:36pm
I believe the Laser, Meteor, Telstar and ill fated Capri, all fall into your 25 - 30 year timeframe.
Ford were making smaller cars here in the 1980's - yes some of these started a CKD kits from Japan, but ended up much different to their Mazda donor cousins.
So their thinking isn't new, just a little delayed in response to the market here in the last six or so years.Agree (0) Alert moderator
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George:
22 Aug 2008 12:06:48pm
Ben, although seemingly selling well, I hear many of the V-8s are often second car 'show ponies' that typically sit in the garage for most of the time, and come out on the weekends for an occaisional recreational drive.
I think small or hybrid car trends are the future staple car market.Agree (0) Alert moderator
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Juliet:
22 Aug 2008 9:31:10am
this industry has already received billions of australian taxpayer dollars in support. they are multinational companies that should stand or fall on their own. it is time to stop throwing good money after bad. if they can't compete then tough luck. let's support new industries & technologies by all means, but not these multinational dinosaurs.
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EpicMagic:
22 Aug 2008 9:44:00am
It's indicative of the company as a whole. Look at what's happening to Ford in America. It's going down the gurgler. Maybe if Ford produced some decent vehicles that didn't promote bad driving and irresponsibility then they would be doing better. As for the 350 workers to lose their jobs, sad times ahead for you guys but Ford has never been reliable at anything.
The company is on the slow decline, and I think it should be allowed to die. Its the only humane thing to doAgree (0) Alert moderator
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dragon:
22 Aug 2008 9:53:05am
" ...and I think it should be allowed to die. Its the only humane thing to do"
No ! Humanely, the company should be euthanase ;)Agree (0) Alert moderator
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wmc:
22 Aug 2008 9:52:40am
Given that Toyota received recent government funding then the other car makers should receive government funding too.
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bushranger:
22 Aug 2008 9:53:02am
Will someone canning the industry explain how replacing $7 billion of export revenue with the equivalent in imports is good for our Balance of Payments? In short it is another $13 billion a year we have to pay to someone else - and there is not one Australian job in it.
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Steve:
22 Aug 2008 12:31:23pm
Bushranger, good point.
How it works is investment of capital and people in the under performing industry are put to use doing something they can do well. Has anyone supporting the local industry stopped to ask why we need it? If we are to build export markets, we should be doing it with goods that are valued and wanted by consumers. I can paint like a five year old, but theres not a large market for the end result. I would like a tax to help me.
And as for the need of our army, are we going to fight a war that these plants will be of any use. We require high tech, not low and quickly produced.Agree (0) Alert moderator
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Robbie:
22 Aug 2008 9:53:15am
Im really sorry for the workers that will be losing their jobs at Ford.
The new Falcon is very well built and attractive looking car with a unique engine. It doesnt deserve to die a slow death or to be overlooked by buyers.Agree (0) Alert moderator
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what the:
22 Aug 2008 9:59:26am
Once Ford Australia actually makes a product worth buying and competitive with Japanese vehicles, then I might actually buy one. Why we keep propping up an inferior product and expect results is beyond me. Start making a quality product suitable to the current market conditions, start getting with the times and people will start buying more cars. I mean they just figured out sticking a turbo on a six might be a good idea, the Japanese have been doing that for decades!!!
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derek409:
22 Aug 2008 10:09:49am
Maybe it is time for the "Australian car industry" to cull the various makes and models that they persist with and make a really decent vehicle which is compatible to most European models. Take Peugot for example. These are a relatively inexpensive, extremely good quality vehicle. Maybe if efforts were concentrated on quality rather than quantity people might just buy more local vehicles I for one although being a true dinky di patriot will not compromise when it comes to purchasing major items like these. After all which Countries are most of our clothing, small goods etc, etc. made. Not too many here. So is there such a large difference with motor vehicles.
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Sanjay:
22 Aug 2008 10:13:40am
There are still making the same type engine in every new falcon. It had to be there own fault to researching in smaller engines or diseil engines...
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johnno:
22 Aug 2008 10:16:36am
This is all part of the push to get rid of the monarchy and establish a republic - a banana republic.
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suzie57:
22 Aug 2008 11:56:29am
Are Aussies "obsessed" with large cars? Perhaps. Though smaller cars like the corolla are selling well. At anyrate, driving conditions in most of Australia are very different to Europe. Living in the country, I have pondered moving to a smaller car but am not sure how it would live up to the long miles of rough roads I travel weekly. I do have my back to think of as well. I own a ford, and while it may not be comparable to an Audi, it is nevertheless very smooth and comfortable - and easily repaired and maintained. When I lived in the city I drove small cars, but out in the bush, hmmm, I'm not so sure.
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Bacchus:
22 Aug 2008 12:06:18pm
A lot of people seem to think the big Aussie six is not an efficient car. I run my gassed Falcon on 8 cents per km in city driving. How many four cylinder petrol or diesel cars can match that.
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Ksail:
22 Aug 2008 12:24:02pm
While I agree with those who say if the auto builders can't stand on there feet without support,then let them fall over.
However history shows that countrys of large landmass who don't maintain an ability to build and service machinery IE: Cars, Trucks,Tractors, Trains, shipping and steel making are putting them selves at risk of not being able to support them self when the shit hits the fan and they find they going to have fend for themself.
Maybe we look at making a world leading 4x4 non rusting economical on fuel and purchase price type of cars and trucks that runs on natural gas.
One thing is for shore we can't just keep doing what we are doing.Agree (0) Alert moderator
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CHERIE L CURRAN :
22 Aug 2008 1:00:30pm
Oh! I see that Bracks is now into the car industry and no longer contesting the Vic. bush fires, got a little bit hot for you there Darling?
Bracks can ignorantise the Queen and now he is getting loose into the Yanks, I wonder is he a Communist running under the guise of Labor???
Don't know much about History, don't know much about Biology, don't know what a slide rule is for but this I do instinctive know, that all our values of yesteryear are falling by the way.
To patronise an Inventor or World First in anything, isn't what Australians are renown for.
I, myself admire invention and support that Invention. After all, when people are getting around on horse back and Henry T Ford comes out with an a affordable product for the man of the house and his family. Who would I be, to argue.
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be low in price that no man making a good salary will be unable to own one-and enjoy with his family the blessing of hours of pleasure in God's great open spaces".
So it seems like to me, without spending all day on 'google' searches, to determine that the Automotive Car Industry race, began between the Germans and the Americans is of little compensence.
People today are primarilary only concerned about the cheapness of the vehicle and how many extras they can get. Myself I drive a Ford because my Daddy drove a Ford and I will be governed by him.
Without the Americans we wouldn't be here now. Think about it.
I have a certain amount of respect for both the Germans and the USA. My allegiance is to USA mainly because of availability and affordability.
I would apply the same sort or principles, judgement or cohesion to anyone of any persuasion, for said invention.
But alas, alack, certain persons within our midst seem to prefer to encourage patronism elsewhere.
Like the Environment, like the Judicial System, this direction has also failed.Agree (0) Alert moderator
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BlzBob:
22 Aug 2008 1:21:03pm
The problem with tariffs is there permanency, they should be floating and not fixed.
Base the tariffs for different classes and categories of vehicles on the percentage of locally produced and purchased items.
when local production and sales are low tariffs rise, incouraging local industries to invest in production.
when local production and sales are high tariffs fall, encouraging efficiencies.Agree (0) Alert moderator
