Bloomberg News

Ford to Cut Third of Australia Plant Jobs as Demand Declines (1)

February 06, 2014

Ford's Assembly Plant

The Ford Motor Co. logo is displayed on signage outside the company's Broadmeadows assembly plant in Melbourne. Photographer: Carla Gottgens/Bloomberg

Ford Motor Co. (F:US) will cut about 300 jobs at its Australian manufacturing plants and slash production by a third in June as it prepares to close its car lines in the nation in 2016.

Daily production will fall to between 80 and 90 cars from 133 at present, Wes Sherwood, a spokesman for the Dearborn, Michigan-based automaker, said by phone today. None of the models made in Australia will cease production early, he said.

Three of Australia’s four carmakers have announced plans to stop production in the country since 2008 as the strength of the Australian dollar, a fall in trade tariffs, the small scale of local plants and a focus on unpopular designs pushed consumers to cheaper imported models. Ford said in May that it would stop output in October 2016, while General Motors Co. (GM:US)’s Holden unit announced a 2017 departure in December and Mitsubishi Motors Corp. sold its last locally-made car in 2010.

“We will have to reduce production in June by about a third, with related job losses,” Sherwood said. The cuts would be spread between its sites in the Melbourne suburb of Broadmeadows and in the nearby city of Geelong, he said.

Sales of Ford’s Falcon, the vehicle driven by Mel Gibson in the film “Mad Max” and the country’s best-seller until 1995, have dropped by two-thirds over the past five years, falling to 10,610 cars last year from 31,023 during 2009, according to data from the Federal Chamber of Automotive Industries.

Toyota Dispute

Ford employed as many as 3,014 people and produced 209 vehicles daily at the two Australian plants as recently as July 2012, when it announced a 29 percent production cut. There’s about 1,000 plant workers at present, Sherwood said.

Australia’s employment minister Eric Abetz said Jan. 28 that the government would intervene in a dispute between car plant workers and Toyota Motor Corp. (7203), the only carmaker that hasn’t announced a departure from Australia.

Toyota has appealed a Dec. 12 decision by Australia’s Federal Court blocking a vote on changes to its contract with plant workers, which it wants as part of plans to cut the cost of producing cars locally by about A$3,800 ($3,400) a vehicle.

Holden’s planned closure “will put our manufacturing operations and the local supplier network under unprecedented pressure,” Toyota Australia President Max Yasuda said in an e-mailed statement Dec. 12. “It is now more important than ever before that we make urgent changes.”

The changes sought to the agreement included the removal of additional allowances paid to trained first-aid officers, those who work in cramped or confined spaces, and those who make blood donations, as well as changes to overtime requirements and fixed-term contracts, according to a submission in the Federal Court case.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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