Ford to end Australia production

Ford Falcon
23 May, 2013 11:50am Tom Phillips

Troubled Ford of Australia confirms closure of its two factories in 2016

Ford has announced that it is to stop building cars in Australia from October 2016. The move was signed off last night, and will see the firm’s manufacturing plant at Broadmeadows in the north of Melbourne, and its engine plant in Geelong close with the loss of 650 and 510 jobs respectively.

Ford has blamed the strength of the Australian dollar for the move, with Ford of Australia president, Bob Graziano, saying, “"Our costs are double that of Europe and nearly four times Ford in Asia."

Trading conditions in Australia are tough, as the country’s mineral wealth has bolstered the strength of the dollar, driving up costs of locally built cars when compared to imported models.

Sales of large saloons have also fallen rapidly, with buyers looking to downsize – the current best-selling car in Australia is the Mazda3 – or switch to SUVS.

The news comes in the same week that Ford of Europe chief, Stephen Odell, issued a rallying call to European policy makers to improve trading conditions in the area, to help boost sales and reduce manufacturing costs.

However, Ford has also announced that its US sales are continuing to boom, with the firm confirming that it will build an extra 200,000 vehicles in the States this year to meet increased customer demand.

Ford has been building cars in Australia since the Model T was first constructed in 1925. Ford’s Australia arm built around 37,000 cars but lost £93million. Ford of Australia has lost around £386 million in the past five years.

The current Ford Falcon and Falcon-based Territory SUV will receive one final facelift – paid for with help from the government – before the manufacturing plants are closed.

Although Ford will stop building cars in Australia, the firm is planning to expand its line-up by 30 per cent by 2016, including adding the new EcoSport to the range.

That should also mean that the famous Ford versus Holden rivalry played out in the V8 Supercars series remains hotly contested. Holden has promised to remain a carmaker in Australia until at least 2022.

Ford’s Australian workforce will be helped to find new jobs, with the national government contributing around £19million, while the state of Victoria, where the plants are located, adding just under £6million. However, Australian Prime Minister, Julia Gillard, has called on Ford to contribute to the fund.