Ford Australia is to cut 440 jobs and reduce daily production of the large Falcon range and Territory SUV spin-off from 209 to 148 vehicles in November.
The news caused Victoria state parliament opposition outrage and a call for premier Ted Bailleau to come up with a jobs creation plan.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Baillie called the new affecting the Geelong and Broadmeadows plants a “disappointing announcement” for employees and their families, according to the Herald Sun newspaper.
The automaker will start with voluntary redundancies but will sack staff if the target isn’t met.
“It is a yet another challenge for the automotive industry,” Baillieu told the Herald Sun.
“I’m at least pleased that Ford have indicated that they intend to stay and they will meet their commitments that were made in terms of the arrangements that were made in January.”
Ford committed to manufacturing in Victoria as part of a A$103m commitment made in January with federal and state government assistance.
Baillieu said the Government would work with Ford to try to safeguard its future in Victoria.
But federal industry minister Greg Combet said the the car industry would not receive any more federal funding.
“We have A$5.4bn committed through to 2020 with the auto industry,” Combet said.
“I’m not committing any funds at this point in time to anything additional.”
Combet also dismissed as “completely ridiculous” Opposition claims the Ford job cuts were linked to [newly introduced] pricing carbon.
“It is totally wrong. It is a wilful misleading of the community to suggest that is the case, and all I can say is go and ask the CEO of Ford,” he said.
Workers were angry the company failed to advertise the new four-cylinder Falcon model [the EcoBoost powered model was announced earlier this year] and were worried the line would be replaced altogether by the US made Ford Taurus.
Brendan Sexton, who has worked at the Geelong plant for 28 years, told the paper he could not understand why Falcon sales were diving.
“We make a great car but Australians don’t buy them,” he said.
“The Falcon is a better car than the Commodore but they are still selling.”
He said Ford workers were paying the price because consumers were cautious.
“There’s so much uncertainty, people are not buying new cars, you have to watch what you spend at the moment,” he said.
Union officials said the average worker would be offered around 30 weeks redundancy pay.
The company will have another four shut-down days in August, which is on top of at least a week off on half pay this month.
Ford Australia president Bob Graziano labelled hundreds of job cuts to hit the state’s car industry as “a sad day for us”.
He told the Herald Sun the car giant would slow its car production as it attempts to stop a slide in sales of large cars.
He said the company’s large car sales were down 25% compared to the same time last year.
“We have to manage our business to be as efficient as possible going forward,” he said.
He said the sales slow-down of larger cars was indicative of troubles facing the industry.
But he said no further redundancies were planned.
Ford Australia announced a A$290m loss in May, partly due to weak Falcon sales.
Problems within the supply parts industry, with the collapse of key supplier CMI Industrial, also slowed Ford’s production lines.
The total number of factory workers was 1,800 before the redundancies, bringing the headcount down to under 1360.
The latest sackings come after 240 jobs were cut at the plant last year.
The paper said there are grave fears that Ford will no longer be viable in Australia beyond 2016, putting the entire car industry at risk.
Unions reckon the industry needs three major car manufacturers to be viable – the others are Toyota and General Motors’ Holden.
In a Herald Sun editorial, Australian motoring pundit Paul Gover predicted the jobs cuts were the beginning of the end of Ford Australia. “The Falcon will die in 2016,” he said.
“The family-sized Ford has been on a slippery slope for nearly a decade, and the Holden Commodore has also been going badly backwards this year as customers have switched in ever-increasing numbers to imported SUVs.
“Things would probably be worse for Ford and its workforce if the Territory SUV was not contributing 50% of sales for the troubled carmaker, which is being hit worst by another 25% downturn in large car sales this year.
“No-one at Ford is making any promises beyond the end of 2016, following a planned update to the current Falcon in 2014 that’s partly funded by more than A$30m from the federal government.
“That says everything about the Falcon and, most likely, Ford’s extremely shaky future as a local manufacturer. But the trouble runs deeper, as the closure of Ford’s carmaking business would almost certainly have knock-on effects at Holden and Toyota.”
Local suppliers needed “a critical mass for local production and, more importantly, the ongoing investment in new technology and components”.
“Without Ford Australia as a local producer, their future would also be shaky and – in a major knock-on – that could easily undermine the plans of Holden and Toyota.”
Gover noted that the Falcon rival, the Commodore, was “only locked in place until the end of 2016, although Holden – thanks to the Cruze, and the showroomsuccess of the locally-made compact car – is committed to a much longer future as a manufacturer.
“So today’s announcement could easily be the beginning of the end for Ford Australia – and perhaps even worse for the Australian motor industry.
Ford in 2009 axed plans to build the latest Focus in Australia. Production for Asian markets, including Australia and New Zealand, began late in June at Ford’s new second plant in Thailand.
