Ford to slash production and jobs in Australia

FORD Australia has announced it will cut production by 23 per cent and lay off up to 15 per cent of its workforce by the end of the year as the large car market continues to soften.

The move comes only one week after the Bracks Review recommended that import tariffs be halved to only five per cent, and unions have been quick to call on the government to freeze the tariff at 10 per cent, fearing further damage to the local industry.

However, industry minister Kim Carr said he is still optimistic about the future of the industry and Ford Australia said it remains committed to a long-term plan for success in Australia with the shift to small car manufacture from 2011.

Ford Australia communications manager Sinead McAlary said that company was seeking between 300 and 350 voluntary redundancies, spread evenly between its Broadmeadows production line and the Geelong engine plant.

In mid-November, Falcon and Territory production at Broadmeadows will be reduced from 52 vehicles an hour to 40, resulting in the daily built rate dropping from 365 to 285.

The Christmas holiday period will enable Ford to upgrade the plant, including the introduction of new robots in the paint shop.

Ms McAlary said that, while the new Falcon has increased its market share, the decline in large car sales caused by rising fuel prices, and a general softening in the new car market that started in July and is expected to prevail through to the end of the year, had forced Ford to make the cuts.

Unions had warned that reducing tariffs could result in job losses at the car plants, with subsequent losses at component suppliers.

Left: Ford is banking on the success of the Focus.

Australian Manufacturing Workers Union state secretary Steve Dargavel called on Prime Minister Kevin Rudd to freeze tariffs at 10 per cent, which is already one of the lowest trade protection levels in the world.

Ms McAlary said that 300 new jobs would be created when Focus production commences in 2011 and that the introduction of a locally-built small car put the company in a good position for the future, adding up to 40,000 vehicles to annual production.

“Ford Australia remains committed to its long-term plan for success in Australia, including an increased regional product development role, manufacture of small cars from 2011, and the introduction of a range of new powertrain solutions across its local product line-up from 2010 onwards,” said Ms McAlary.

“In addition, Ford Australia continues to play a broader role in the success of Ford Motor Company within the Asia-Pacific and Africa region with greater input and alignment across all areas of the business, particularly product development, information technology, purchasing and marketing and sales.

“Positive outcomes resulting from the increased regional scope of activities include vehicle development responsibility for the global T6 truck program and B-cars for the Indian market, as well as development of ongoing local product programs.”

Speaking on ABC radio in Melbourne last Friday, Senator Carr said Ford’s latest cutbacks highlighted the problems in the car industry but did not undermine the Bracks review and its recommendations that more funding should be directed to the sector.

“It highlights the difficulties that the industry is facing, the acute problems that have arisen as a result of increases in interest rates, increases in petrol and changes in consumer demand,” he said.

“The industry’s facing the most acute challenges it has faced in recent times. It’s my view, with the right investment decisions, the industry can go on and be much stronger and we can maintain a very strong industry in this country.

“The fact is that a car industry is extremely important for Australia’s economic and social wellbeing. It is a vital part of our manufacturing base. It provides the spillovers that allow us, in a whole range of other manufacturing industries, to do very well. It even provides the foundations for advances that we make in the mining industry.

“You can’t make a jet fighter without having a strong car industry and that’s precisely what we are doing now. It means that we can actually make railway rolling stock we can provide services to a whole range of other sectors. So it’s extremely important that we maintain the capacity – and once you lose it, you never get it back.”

Asked whether the car industry should be protected at all costs, senator Carr said. “It’s not a question of protecting it at all costs – the fact is that governments all around the world share the Australian government’s view that we must have an Australian car industry on a sustainable basis, and the reason that those governments do is because they understand the benefit it is for their countries.

“In recent years, under the previous Howard government, this industry was left on auto pilot. That’s why we’ve got the problems we’ve got today. For years we’ve faced a policy of neglect and now we’ve got a government that’s actually committed to ensure that the problems are worked through, in partnership with the industry, to ensure that we can reduce the cost of motoring, we can reduce the impact on the environment and we can produce vehicles that people want to buy.

“And we can ensure that we have a much stronger export focus and that we can ensure that there are new investments decisions are taken which will allow this industry to transform itself quickly.”

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