Ford to stop manufacturing cars in Australia

The American manufacturer cites that it is no longer viable making cars in Australia due to the rising costs and lower profit margins


2013 Ford Territory

Ford has decided to shut its manufacturing units in Australia. The American manufacturer cites that it is no longer viable making cars in Australia due to the rising costs and lower profit margins. Ford has been in Australia for almost a century. Bob Graziano, Ford Australia’s boss said that from October 2016, the two plants in Broadmeadows and Geelong in Victoria will be closed and that the legendary Falcon brand will also be axed. Currently, Ford employs 3500 people at both the facilities. The two plants manufacture the Territory and Falcon SUVs. Graziano said that the cost of manufacturing in Australia is twice that of Europe and nearly four times that of in Asia. About 1200 jobs in Australia are at stake following Ford’s decision.  Following Ford’s announcement, Australian Prime Minister Julia Gillard has promised Rs 273 crores to those affected with the pullout as also to Ford’s local suppliers. She also said that she doesn’t agree with Ford’s statement that it is not viable any longer to carry on a sustained manufacturing plant in Australia.

Ford had received grants from Australia last year. This money apparently has been used to roll out the facelifted Territory and Falcon cars, which Ford will sell as 2014 models. And then again Ford says that it wants to expand its portfolio before the final plug is pulled. Ford also has a design and technology centre in Australia to cater to the needs of the Asia-Pacific and African market. Abhay visited the design centre in 2012 and came away impressed with the new technology being developed, and at the time, it was to be the design hub for all Asian-market vehicles. The Ford Figo and EcoSport being two key vehicles that began life in the centre.

As of now, there is now news whether this centre will continue to operate or will be shut down. This is not the first time that a company has closed its factories in Australia. Mitsubishi also had shut shop in 2008. GM Holden, the local wing of General Motors also said that it was cutting 18 per cent of its workforce citing damage to its competitiveness from the strength of the Aussie dollar. The automaking sector in Australia currently employs more than 50,000 people with associated industries contributing for another 250,000 jobs.

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