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Ford starts factory slow-downs

Taxing time: Ford is blaming changes to the federal government’s fringe-benefits tax for the downturn in sales of the Falcon and Territory.

Planned Ford factory down days start this week in response to slowing

Ford logo23 Aug 2013

FORD Australia has started implementing planned production slowdown measures this week across its Broadmeadows assembly plant and Geelong engine and casting operations in Victoria as it responds to slowing car sales.

Yesterday's production downshifts continued today, with more than 700 staff staying away from the Australian car-maker’s production lines, placed on half-salaries for their aborted shift.

As GoAuto has reported, Ford revealed earlier this month that it would need to slow down production of the Falcon sedan and ute range, and the Territory SUV, in response to changes to fringe benefits tax laws that have changed the way buyers lease or salary sacrifice vehicles.

The changes, introduced by the Rudd government in July as part of a package of federal budget reforms, have cut deeply into the salary-packaging industry, which shed hundreds of jobs within days as new-car leasing orders dried up.

The measures are meant to help the federal government fill a $1.8 billion hole in the federal budget, helping pay for the government’s early move to an emissions trading scheme.

Ford has planned 12 days of downtime over the next two months to help it reduce its stockpile of unsold cars.

However, a Ford Australia spokesperson this morning refused to confirm if the shutdowns were also in response to flagging sales of its Falcon large car, which slumped to a record low of 594 during July – well down on the 941 sales it pegged for the same month last year.

The federal government has proposed a $200 million rescue package to help Australia’s three local car-makers – Ford, Holden and Toyota – weather the storm, as well as urging local and state governments to prioritise the purchase of Australian-made passenger cars over imported ones.

As announced in May, Ford is preparing to close its Australian manufacturing operations in October 2016.

The company has since reaffirmed its commitment to continue production to this date, and to introduce a model upgrade for Falcon and Territory next year, despite ongoing pressure on vehicle sales.

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