Citing Weak Demand, Ford to Cut 440 Jobs in Australia

Citing Weak Demand, Ford to Cut 440 Jobs in Australia

Ford said the jobs will be shed from its manufacturing plants in southern Australia's Geelong and Broadmeadows as part of a sweeping restructure to address plunging sales of its once-popular larger passenger vehicles, such as the Falcon saloon and the Territory SUV.

Ford Motor Co. on Tuesday said it will sack 440 Australian workers as it scales back production due to muted demand, despite a multimillion-dollar government bailout earlier this year.

Ford (IW 500/6) said the jobs will be shed from its manufacturing plants in southern Australia's Geelong and Broadmeadows as part of a sweeping restructure to address plunging sales of its once-popular larger passenger vehicles, such as the Falcon saloon and the Territory SUV.

Ford Australia President Bob Graziano said the changes, which will see production pulled back from about 210 cars to 150 cars per day from November, are "essential to ensure the longer-term health of the business."

"That adjustment to production allows us to run the plant as efficiently as we can given the volumes that we're projecting for the mid- to longer-term," said Graziano.

"We have to look at our manufacturing based on what we have on a corporate basis."

Ford shed 240 jobs in Australia last April when it scaled back daily production from 260 cars. The latest cuts will leave Ford with 1,120 factory workers.

High Local Dollar Hurting the Auto Industry

Australia's auto industry is struggling with the effects of the high local dollar, which has traded near or above parity with the greenback for almost two years, squeezing exports and compounding rising production costs.

Though Australia did not go into recession during the financial crisis, domestic confidence has failed to return to pre-crisis levels, also hitting car sales.

Canberra extended a $3.2 billion (in Australian dollars) bailout to the ailing auto industry at the height of the global downturn and stepped in with additional lifelines to Ford and General Motors subsidiary Holden earlier this year.

Prime Minister Julia Gillard defended the government bailouts, which included Aus$34 million to prop up Ford production in January, saying they averted much more drastic losses.

"The assistance we've provided was struck right with Ford, it was struck to ensure that Ford continued to produce motor vehicles here until 2016 at least," she told reporters.

"We've seen these job losses today and that's very sad news, but if we hadn't stepped forward to work with Ford, we would be talking about job losses in their thousands," she added.

Holden in February announced that it would sack 100 workers, just one week after Australia's third major automaker, Toyota Motor Corp. (IW 1000/5), fired 350 staff -- about 7.5% of its workforce -- due to "severe" operating conditions.

The auto industry employs about 56,000 people in Australia and exported about $3.3 billion worth of vehicles and components in 2011.

Copyright Agence France-Presse, 2012   

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