Why Ford Australia to stop making cars

Ford is closing its 2 Australian motorcar plants and ending production of cars together with the Falcon in 2016 amid soaring manufacturing costs and plummeting sales.

The closure of the automaker's plants in the state of Victoria will mean the loss of 1,200 direct jobs, as well as affecting industries that supply parts and support, and will leave Ford as an import-only brand in Australia. Ford began making cars in Australia in 1925 and is the third-largest carmaker in the country.

"We understand the very real impact that this can wear our team," Ford Australia president Bob Graziano told reporters at the company's Melbourne plant. "We came to this conclusion only once completely reviewing our business and exhausting all alternative alternatives."

Australia's high dollar has put pressure on the country's carmakers, with locally produced cars more expensive than those made overseas. In April Ford's chief competitor, Holden, said it was cutting 500 jobs amid the high dollar and falling demand.

"The strength of the Australian dollar bears down on Australian manufacturing and it does make it a difficult environment for manufacturing to prosper," Julia Gillard, the Australian prime minister, said following Ford's announcement.

The carmaker released its annual financial report, which showed a loss of A$141m dollars (£90m/$136m) after tax for the 2012 financial year. That follows a loss of A$290m in 2011 and a total loss of A$600m over the past five years.

Graziano said a reduced demand for large cars and the high price of production in Australia had left the manufacturing operation uncompetitive. Ford's production costs in Australia were twice that of Europe and nearly four times higher than in Asia, Graziano said.

"Manufacturing is not viable for Ford in Australia in the long term," Graziano said.

Around 1,500 employees will continue working for the company after production ends in October 2016, and dealerships and product development facilities will remain in place, Ford has said.
Source: guardian.co.uk

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