Ford Oz fails, Falcon grounded

2013-05-24 10:23

MELBOURNE, Australia - Ford Australia has announced the end of production at its unprofitable plants at a cost of 1200 jobs - and the awesome Falcons.

Ford Australia chief executive Bob Graziano made the announcement as he revealed losses of R1.2-billion after tax in the last financial year and R5.5-billion over the last five years.


Graziano said: "Unfortunately we will cease our manufacturing operations in October 2016. As a result, 1200 jobs will become redundant when those sites close. Given the fragmented market and the low model volumes that result, we decided that manufacturing locally was no longer viable. Our costs are double those of Europe and nearly four times those of Ford Asia."

Graziano - a former boss of Ford SA - said the decision was the result of local manufacturing being "driven by increasingly challenging market conditions - including market fragmentation and the high cost of manufacturing".

Australia has annual sales of only 1.1-million new vehicles but buyers have access to more than 65 brands and 365 models which, Graziano said, made Australia one of the most competitive and crowded automotive markets in the world.

"The business case simply did not stack up, leading us to the conclusion (that) manufacturing is not viable for Ford in Australia in the long-term."

Ford's factories in Victoria state will close but Ford Australia will now import product and employ 1500 people.


Australian prime minister Julia Gillard said the government would contribute the equivalent of  R276-million to support communities affected by the closures and R92-million to help automotive suppliers diversify. Gillard said:

"I understand many people will hear today's news and it will worry them. I understand that and I want to say to Australians that here in our nation we show time after time how good we are when we work together."

According to The Australian.com, Dave Oliver, Australian Council of Trade Unions secretary asked Gillard to call for a "crisis summit" on the future of the nation's automotive sector. Oliver said: "Car manufacturers are struggling with the high (Ausralian) dollar and trade barriers imposed by other countries. We need to ensure that our car industry remains viable so it can be part of the diverse economy we will need after the mining boom.

"The car industry provides 200 000 direct and indirect jobs and supports hundreds of smaller manufacturing businesses."


According to the Detroit News, the automaker plans to retire its Falcon, a vehicle that for decades has been exclusively produced in Australia and was for some years sold in South Africa.

Graziano told the DetNews: “The Falcon name is inextricably linked to Australia and being produced here. We will retire that name when we retire that vehicle (in 2016).”

The Falcon was sold in the US until the 1970's. For the past two decades the car, also available as a bakkie variant called the Falcon Ute, has been built exclusively in the Australia. Sales in Australia have fallen dramatically since 2000 and Ford has sold fewer than 20 000 Falcons annually in Australia since 2011.

Ford plans to update the Falcon a final time in 2014. The automaker has not decided the fate of its Territory SUV, which is based on the Falcon platform and sold in Australia.


Australian Manufacturing Workers' Union president Paul Bastian said the news was "a disaster" for workers and "a tragedy" for the local and national economies. "We want the government to call a meeting of all the auto players. We want to take the positives out of this. We want bipartisan support to see what we can do to ensure that we have an auto industry, that we have an industry that is sustainable."

The DetNews said Australia's auto industry was struggling with the effects of its expensive dollar, which has traded near or above parity with the US dollar for almost two years, squeezing exports and compounding rising production costs. Though Australia did not go into recession during the global financial crisis, domestic confidence has failed to return to pre-crisis levels, hitting car sales.

Canberra extended a R30-billion bailout to the ailing sector at the height of the global downturn and stepped in with additional lifelines to Ford and General Motors' subsidiary Holden in 2012.

Ford first began making vehicles in Australia in 1925 when Model T cars rolled off the production line in Geelong.

  • Kwashirai Chigodora - 2013-05-24 12:14

    they will import products and employ 1500? is this a remainder of the 1200 who will have lost their jobs or a completely new people? Because if its not the remainder after the 1200 lost, then Australia stands to gain in employment terms, we more people employed afterwards. am i wrong? Also... this demise might be from the Aussies' rather closed and tight immigration policies. Who would even know their products? except petrol heads or ford and Holden fans? And that crazy value of their dollar which made me fail to import a racing bike from there once. Economically and tourism wise (or any other way actually) Australia doesnt exist for me. all i think of is a koala bear and that funny mountain when one says Australia

  • Keith Monale - 2013-05-24 12:37

    So a company pulls out and 1500 people are out of work. And then the government chips in millions to "help affected communities" and "to help automotive suppliers diversify". The Union rep than says they want the government to call a meeting involving all stakeholders so that they can "take the positives out of all this". I am no fan of Australia but its really refreshing to see people work together and approach bad situations constructively.

  • Trevor Bush - 2013-05-24 13:38

    The Aus Government is really useless, they killed their motor trade slowly and systematically over the last few years, besides mining, what else does Aus have to offer, bottle jelly fish...skin cancer....stupidly expensive...and a holiday resort for the Chinese...LMAO..

      Freddie Jones - 2013-05-25 02:27

      I do believe that they have one or two sheep!

      Janice Kuhler - 2013-05-25 03:33

      What else does Aus have to offer? Just a few inconsequential things like unemployment of 5,5% (as opposed to the 'official' 25,5% in SA), lower crime rate and police who actually respond, investigate and solve crimes, clean streets, friendly, polite and efficient shop assistants, a postal service that works, a goverment that recently reduced the interest rate in order to stimulate the economy, an economy that has grown by 13% since the GFC, a health system that ensures that the public get decent treatment at public hospitals, a first-world economy as opposed to one heading for complete economic failure (according to Clem Sunter, who knows a little bit)..... As a 'bitter einder' who hung on in SA for as long as I could, I can honestly say that Australia has much more to offer me than SA. BTW, have you ever lived in Australia? I've lived in both countries. Of course every country has it's problems, but to say that Australia has nothing else to offer but bottle jelly fish (it's actually boxed jelly fish and they occur in one specific area at one specific time of the year) and is stupidly expensive (well yes, but it costs money to ensure high standards and pay livable wages) only shows your ignorance.

  • Vickers Vermeulen - 2013-05-25 14:47

    The sad passing of a dinosaur. Falcon will be fondly remembered but times have changed and the days of big V8's are long gone. Why the Ozzies didn't see the change and started to adapt long ago remains a mystery.

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