VANCOUVER – Faced with $600 million in losses over the past five years, Ford is pulling its manufacturing operations out of Australia.
The company announced the shutdown of two plants in the southern state of Victoria, on Thursday, but said the sites wouldn’t close until 2016.
After more than 100 years since the first Model-T arrived on the continent, Ford has grown to be a part of the cultural landscape — with auto industry watchers awaiting the annual unveiling of the latest model of the Australian-made Ford Falcon.
“In Australia, you’re either born Ford or (General Motors-owned) Holden. It’s like a religion,” Andrew Bynes, of Ford Clubs New South Wales, told the Australian Broadcasting Corp.
Ford, which has been operating in Australia since 1925, said making automobiles in the country was less profitable than importing them.
Ford Australia President and CEO Bob Graziano told reporters its local manufacturing operations cost double that of those in Europe and four times what it costs in Asia.
“We know this announcement is very difficult, especially for our employees,” Graziano said. “Providing support to those in our team whose roles will be affected is a key priority for us during this three-year transition period.”
The decision will make 1,200 jobs redundant in the communities of Broadmeadows, a suburb of Melbourne and Geelong, 75 kilometres south.
Prime Minister Julia Gillard told Australian media it was “a sad day” for workers and their families.
Gillard said the federal and state governments would commit a combined $39 million to support the eventually-unemployed workers, and called on Ford to provide a “substantial contribution” to that fund.
She said her government will work with those put out of work to find new opportunities, and told suppliers a $12-million fund has been set up to assist those working in the supply chain.
“The strength of the Australian dollar bears down on Australian manufacturing and it does make it a difficult environment for manufacturing to prosper,” Gillard said.
Although Ford and other manufacturers have said making vehicles in Canada is too costly, the company appears to be continuing its commitment to operate in the country.
On Tuesday, Ford Canada CEO Dianne Craig said the company is working on plans to invest in its Oakville, Ont. Plant.
Earlier reports suggested Ford Canada would pump $1.2 billion into the assembly plant, where more than 3,500 people are employed.
In 2011, Ford Canada shuttered its St. Thomas, Ont. plant – which made Lincoln Town Cars and Crown Victorias – leaving roughly 1,000 people out of work.
The London Free Press reported this week Ford Canada is in talks with Blue Forest Environmental Development to turn the site into a $700-million food sector development.
Ford Canada also employs 1,300 workers at three facilities in Windsor, Ont.
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