Ford Australia to stand down workers in July

FORD will consider longer-term job cuts after confirming this morning that it will shut the doors on its Victorian manufacturing plants in Broadmeadows and Geelong for a week in July.

The temporary closure – from Friday, July 6 – comes as the company battles plummeting sales of its locally built Falcon large car, which have dropped a further 25.2 per cent this year, with just 1008 units sold in May, despite the introduction of a new four-cylinder variant.

Ford Australia public affairs director Sinead Phipps told GoAuto this morning that the company was looking for ways to match its production levels with market demand, and that a “down balance” of production lines – a corporate way of saying job cuts – was one possible alternative.

“As we talked about with the union last week, we are looking at a number of ways in which we can manage our production,” she said.

“We’re currently managing that by implementing down days, but we’re looking at other potential alternatives, one of which would be a potential down balance, but we have not made any decision at this stage.” Ms Phipps said another possibility was to place more emphasis on the production of the Falcon-based Territory SUV, sales of which are up a substantial 57.4 per cent year-to-date following the introduction of a popular diesel variant early last year.

“That (upping Territory production) is actually a slightly tricky thing to implement in terms of production down the line, but it’s one of the things we are looking at,” she said.

From top: Ford Falcon EcoBoost and Falcon EcoLPI.

The confirmation of stand-downs comes just one month after Ford Australia announced an after-tax loss of $290 million for the 2011 financial year – its largest ever – much of which stemmed from a one-off tax impairment charge of $212 million.

Falcon sedan has long been the staple of the Blue Oval in Australia, but was outsold in May by its imported Fiesta, Focus and Ranger stablemates, despite the introduction of the turbocharged four-cylinder EcoBoost variant in April.

As we reported at the EcoBoost launch, Ford Australia projected sales volumes of around 250 units per month for the four-cylinder variant for the rest of this year, before increasing its targets from next year.

Sales of the gas-powered EcoLPi Falcon have also been lower than anticipated since that car’s launch in April 2011, with Ford battling supply issues on several key parts, particularly gas tanks provided by APV Automotive Components, which was placed in the hands of receivers in April.

Ford was forced to stand down 1800 staff for six days in April following the collapse of key Victorian-based suspension parts supplier CMI. The receiver of CMI announced the lay-off of 44 workers in May.

Ford Australia president and CEO Bob Graziano defended Falcon sales in April, telling GoAuto that the company has shifted away from its traditional focus on fleet sales and was putting more emphasis on the more profitable private sector.

Ford Australia announced a $103 million investment in local manufacturing in January this year, including contributions from the Victorian and federal governments, which will see Falcon and Territory production continue until at least 2016.

The company has not announced plans for its local operations beyond this point, although reports suggest the Falcon could be replaced with a global large car such as the Taurus or Fusion/Mondeo, in line with the Blue Oval’s ‘One Ford’ strategy of streamlining its global portfolio.

Ford Australia announced earlier this week the closure of its Ford Heritage Centre in Geelong at the end of July after 13 years of operation.