Ford to close Australian plants

Ford will cease its manufacturing operations in Australia by October 2016 with the loss of 1200 jobs.

Ford Australia President and CEO Bob Graziano said the company made a loss of $141 million after tax in the last financial year, with a loss of $600 million over the last five years.

Ford Australia employs more than 3500 people at its manufacturing plants at Broadmeadows, in Melbourne's north, and Geelong.

In January last year, the federal government contributed $34 million to Ford's $103 million production upgrade, and the Victorian government an unspecified amount.

At the time the company said the upgrade would mean the Territory and Falcon models would continue to be made in Victoria until 2016.

Ford New Zealand spokesman Tom Clancy said that while the news would "have a major impact on our co-workers across the Tasman, the restructure does not extend to Ford New Zealand."

"Ford's presence in Australia will remain significant - with 1500 team members, more than 200 dealers nationwide and a continued strong commitment to supporting the communities in which the company operates. And Ford Australia and Ford New Zealand will proceed with plans to launch updated versions of the Falcon and Territory in 2014, as well as offering other world-class products, such as the Fiesta, Focus, Ranger and Kuga."

Clancy said the company would also strengthen its product lineup even further with a 30 per cent increase in the number of new vehicles offered to Australian & New Zealand customers by 2016.

Driven editor Matt Greenop said Ford Australia had struggled in recent years - as had all manufacturers of large cars.

"The writing has been on the wall for a while. Holden developed the upcoming VF Commodore as a joint venture with the US, and already sell a left-hand drive version of the car as Chevy SS. That was a clever move to keep development costs down, as the markets change their focus to smaller cars and crossover SUVs. Ford didn't really have that option with the Falcon, in fact there have been rumours that it would be replaced with the global platform Taurus in the near future. Obviously the future is nearly here."

Greenop said Ford New Zealand had been unable to comment on the report as they too were waiting for the official announcement from Australia, but the effect that these plant closures could have on the company here could be significant.

"The company had hoped to stem the flow of customers out of Falcon with an EcoBoost engine, which was a highly advanced two-litre turbo four-cylinder as opposed to the traditional six-cylinder. Unfortunately, even though the EcoBoost Falcon is a fantastic vehicle out of Australia, the reality was that Falcon buyers don't want a little four-pot, and buyers stayed away."

"Whether Ford New Zealand is still going to be around as we know it in another six months remains to be seen," said Greenop. "Ford is a global company with a strong presence in Europe, so is taking some big financial hits at the moment, and with petrol prices as high as they are in Australia and here, people just aren't buying big cars. Unfortunately for Ford Australia, their locally-built Falcon and Territory are both sizable machines."

Federal opposition small business spokesman Bruce Billson spoke of the impact such a move would have on Victoria.

"If that's true, what a tragedy that would be for Victorian communities, particularly Broadmeadows and Geelong, where the Ford operations are such a huge generator of economic and employment opportunities," the Liberal MP told Sky News.

Ford employs 3500 people at its Geelong and Broadmeadows (Melbourne) plants.

The two plants manufacture the Falcon and the Territory SUV.

In January, Ford announced its Territory and Falcon models would continue to be made in Victoria until 2016.

The company said at the time a $US103 million production upgrade had secured its immediate future.

The upgrade included $34 million in federal government funding, while the Victorian government contributed an unspecified amount.

Ford Australia President and CEO Bob Graziano will make the announcement at the company's training centre in Campbellfield.

He will also release the company's 2012 financial results.

Ford Australia was founded in Geelong in 1925.

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