Ford Australia to cut 440 jobs
BY MIKE COSTELLO | 17th Jul 2012
The company said this morning most of the job cuts would come from the 1800 workers at its factories in Broadmeadows and Geelong.
The redundancies will be voluntary, but a compulsory program will follow if required.
The Australian Manufacturing Workers’ Union (AMWU) called the job cuts a “kick in the guts for workers and their families”, and called on governments to support the industry through more co-investment.
Production at Ford’s Victorian plant will fall from 209 vehicles a day to 148, which Ford Australia president and CEO Bob Graziano said was because of the continuing decline in the large-car segment, with sales of the Falcon sedan down a further 24.6 per cent so far this year.
The production cuts mean the Territory SUV will account for almost half the vehicles rolling off the production line.
So far this year, Ford Australia has recorded 7695 Territory sales – up 52.5 per cent on last year –largely on the back of the popular diesel variant introduced last year. In comparison, Falcon sales for the first six months of the year sit at just 6846 units.
A decade ago, in 2002, first-half Falcon sales were almost four times that figure, at 23,921 units.
News of the job cuts comes just two months after Ford Australia announced a record $290 million loss for the 2011 financial year, and seven months after it announced a $103 million co-investment with the state and federal governments that will guarantee local production to the end of 2016.
The $103 million is largely earmarked for engineering and design updates that are likely to be part of a 2014 facelift of the Falcon and expected to bring fuel efficiency improvements.
Mr Graziano told GoAuto today that the investment remained on the table, and that the company had advised both Canberra and the Victorian government about its decision to downsize.
“We obviously are advising the appropriate folks in Canberra and elsewhere about the decision and the rationale behind the decision, and my sense is they understand the business factors that are driving this decision,” he said.
The redundancies are the second lot of job cuts in 15 months, after Ford announced 240 jobs would go at its Australian plants in April last year.
Mr Graziano said the company remained committed to Australian production until this date, but no decision on its post-2016 future had been reached.
Ford Australia believes it can stabilise Falcon sales, with Mr Graziano saying the company still expected sales of its EcoBoost four-cylinder variant introduced in April this year to pick up after a slow start.
GoAuto understands that combined sales of the EcoBoost and the gas-powered EcoLPi - the other plank in Ford's drive to cut running costs on its large sedan - have made up 21 per cent of Falcon sales since May.
In a statement, Mr Graziano said the reductions were difficult but necessary, with “all affected workers to receive a competitive redundancy package, including training and career counselling”.
“We understand that, unfortunately, the impact on our employees will be significant, but implementing this structural change is essential to ensure the longer-term health of the business, which is important for our employees, our suppliers and the communities in which we operate,” he said.
AMWU national secretary Paul Bastian said that while the union welcomed Ford’s commitment to continue producing vehicles in Australia, today’s cuts would be “cold comfort to those workers looking at losing their job now”.
“We understand that Ford continues to face falling vehicle sales despite significant investment into its locally produced vehicle lines, and that is at the heart of this decision,” he said.
“For 440 workers and their families this is the worst kind of news.
“It’s critical that our Governments continue to show support to the industry through co-investment into the industry. Vehicle manufacturing and the automotive industry provide critical skills and know how to the broader manufacturing sector and government’s commitment to co-investment continues to be well supported by the community.” Mr Bastian said more needed to be done, urging Australian car buyers and government fleets to buy more locally-manufactured vehicles, and Australian car-makers to produce more new and innovative cars that people wanted to buy.
“We also need to make sure that we have genuinely reciprocal trade agreements in place to make sure our local manufacturers can compete equally with foreign made vehicles both in the domestic market and across the region” he said.
“The fact is that there remains significant trade barriers for Australian made vehicles in our region, with some of our closest trading partners and these must be actioned or reciprocated to give our local manufacturers are fair go.
“We also need to encourage local purchasing by providing incentives for the excellent safety ratings of local manufactured vehicles as opposed to some of the imported vehicles.
“This has to be a priority for Government, so we stop the loss of jobs and skills from this critical sector.” Victorian opposition leader Daniel Andrews called on premier Ted Baillieu to implement a jobs plan, saying: “How many more hard working Victorians need to lose their job before Ted Baillieu does his?” Ford is not the only local car-maker to announce job cuts this year, with Toyota shedding 350 workers from its Altona plant in April.
The Japanese company faced criticism at the time for what were described by union representatives of heavy-handed tactics – a charge it strenuously denied.
