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Ford Abandons Australia

May 23, 2013

Ford-Australia-300x225

As egg and Walrus have mentioned already, reports are emerging that Ford is expected to announce the closure of its Broadmeadows car factory and its Geelong engine plant.

The struggling car-maker sent out a media alert about an impending announcement later this morning, believed to be 10.45am.

MORE THAN THAT

Ford was due to release its financial results today but Gutter Trash has been told that the media conference is about “more than that”.

Confidential sources say that Ford Australia will become an import-only brand.

It is unclear when the factories will close but Ford was set to introduce a revamped Falcon and Territory next year.

Journalists at the launch of the new Holden Commodore in Canberra were sent secret text messages by Ford Australia staff in the early hours of this morning, just as they were about to drive the new model on public roads for the first time.

A COINCIDENCE

Ford claims the timing is a coincidence.

Ford Falcon sales have fallen to their lowest since the Broadmeadows factory opened in 1960, and Ford’s overall sales in Australia last year were lower than they were 20 years ago.

Ford Australia is refusing to take calls from Gutter Trash.

The big three car companies employ 17,000 people directly in Australia, while they have 55,000 employees when suppliers are included.

In Victoria, the car industry employs about 25,000 people.

Holden, Ford and Toyota have claimed they spend $2.25 billion in Victoria every year buying parts from local suppliers.

Ford is the third largest auto-manufacturer in Australia and employs about 3000 people.

 

 

 

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50 Comments leave one →
  1. Evil Walrus permalink
    May 23, 2013 9:59 am

    Strange things tend to happen to your business if you keep producing vehicles that are no longer “hip”.

    I struggle to think of anyone who even owns a Ford or Holden. All the older crowd goes for 4WD or AWD and the young ones are in hitech Mazdas or Subarus etc.

  2. Splatterbottom permalink
    May 23, 2013 10:08 am

    It is a consequence of the product and productivity. The unions are doubtless overjoyed that their members will no longer be exploited by an evil capitalist US multinational.

  3. TB Queensland permalink
    May 23, 2013 10:14 am

    Your knickers are showing, sb …

    More like the dumb management team that can’t design, market or sell a decent motor vehicle and our Asian colleagues can …

    Go and stand outside … wherever you are … for ten minutes and count the Asian manufacturers to the local Ford, Holdens …

    Absolutely nothing to do with unions … in fact had they been given a seat on the board (as in Germany) it might be a different story …

  4. TB Queensland permalink
    May 23, 2013 10:16 am

    Read the story of the Harley Davidson company to understand worker involvement in running a business …

  5. Evil Walrus permalink
    May 23, 2013 10:21 am

    That’s right SP. I think if any company receives direct cash from taxpayers then those within the company must suspend or taper their wage demands and agree to better work practices for as long as the handouts continue.

    If I was a car worker with a family and mortgage I’d rather not get my 5% rise and keep my job courtesy of the government then be out of one.

    Same goes for the 3 stage aluminium industry. There is no money in aluminium because China has successfully flooded the market in orde to get its hands on cheap alumina.

    Now that alumina is breaking its traditional linkage to the LME price of aluminium the tide is turning slowly against China.

    But the aluminium industry is still stuffed by massive cost increases (electricity) and oversupply and we still support it.

  6. May 23, 2013 10:26 am

    I’ve never owned a Ford or a Holden..

    They’re ugly looking cars and just guzzle fuel..

    I’ve always opted for either Honda, Toyota or Mazda..

    Although I did have a BMW Mini for a while, but that’s another story…

  7. egg permalink
    May 23, 2013 10:30 am

    ‘stuffed by massive cost increases (electricity)’

    That’s definitely the fault of jools and a pernicious tax.

  8. Tom of Melbourne permalink
    May 23, 2013 10:47 am

    No doubt there will be plenty of blame levelled at high dollar and decades of under investment.

    The fact is that one of the significant reasons for under investment is union behaviour during expansion and upgrade. Manufacturers need to return plants to full production as quickly as possible, history suggests that expansion and upgrade are targeted by unions to advance their claims, and that return to full production is delayed by industrial activity.

  9. IPA address permalink
    May 23, 2013 10:50 am

    Something that can’t go on forever, wont. Production line workers at Broadmeadows “earn” more than suburban solicitors.

  10. IPA address permalink
    May 23, 2013 10:53 am

    Ford’s Bob Graziano: “Our cost structures remain uncompetetive. Our costs are double Europe’s and four times those in Asia.”

  11. egg permalink
    May 23, 2013 10:57 am

    The Victorian premier ‘said the carbon tax was putting pressure on the cost of doing business in the state.

    “The carbon tax has hurt Victoria and continues to hurt Victoria,” Dr Napthine said.

    “It adds costs to our manufacturers and is costing us jobs around the state.”

    AAP

  12. Tom of Melbourne permalink
    May 23, 2013 11:07 am

    TB, I was part of an ‘international benchmarking’ study some time ago. I visited a few of the German companies that are well known, and met their employee board representatives.

    They were generally well intentioned. Their main concern was the loss of credibility they suffered with the workforce. Once they became exposed to the complexity of board decisions, they began to advocate company positions. Many then perceived them as ‘selling out’.

    Having an employee board member isn’t a panacea.

  13. Neil of Sydney permalink
    May 23, 2013 11:51 am

    “Production line workers at Broadmeadows “earn” more than suburban solicitors.”

    I think they are earning 94,000/year. If that is so no wonder our cars cost so much.

  14. Evil Walrus permalink
    May 23, 2013 12:18 pm

    Good news for Cats fans…………

    #Ford says sponsorship of Geelong Cats unaffected

  15. TB Queensland permalink
    May 23, 2013 12:20 pm

    … and that return to full production is delayed by industrial activity.

    That and all the other union BOO! Is BS … people don’t buy the fkn cars … check out the roads in front of you … both Ford and GMH have lagged behind the AWD/SUV progress trying to flog souped up utes and sedans instead of what the market wants … shit even I eventually caught up …

  16. IPA address permalink
    May 23, 2013 12:30 pm

    “both Ford and GMH have lagged behind the AWD/SUV progress”

    They both have participants in that market segment (Kuga/Captiva). And you ignore the success of the locally manufactured Territory. They’re ceasing production of the Territory not because it doesn’t sell – it does – but because it’s too expensive to make here.

  17. May 23, 2013 12:30 pm

    Julia Gillard says sacked Ford workers will be given “intensive employment assistance”

    whatever that is…… 🙄

    http://www.sbs.com.au/news/article/1769912/Australian-govt-will-help-Ford-workers-PM

  18. May 23, 2013 12:32 pm

    Reblogged this on Iain Hall's SANDPIT and commented:
    Having had a couple of Falcons that I really liked to drive but hated to buy fuel for I have mixed feelings about the closure but even Blind Freddy has been expecting this for ages.
    Cheers Comrade Reb

  19. Evil Walrus permalink
    May 23, 2013 12:33 pm

    “Julia Gillard says sacked Ford workers will be given “intensive employment assistance”

    whatever that is…… ”

    What……………….dont you believe her ?

    You must have forgot about all those “green” jobs that kicked in when the Carbon Tax started.

  20. IPA address permalink
    May 23, 2013 12:33 pm

    “Julia Gillard says sacked Ford workers will be given “intensive employment assistance”

    whatever that is……”

    There’ll be plenty of talk about (re-)training, as if training produces jobs.

  21. Evil Walrus permalink
    May 23, 2013 12:41 pm

    “They both have participants in that market segment (Kuga/Captiva).”

    Yes they do.

    But they just don’t measure up in terms of quality of finish and fitout. In that general price range I think I’d prefer a Nissan X-trail, a Honda CRV (luxury version $44K) or a Mazda CX Series.

    Plus Ford dealers in Sydney ( not sure about elsewhere) have a shocking reputation for overcharging on services.

  22. TB Queensland permalink
    May 23, 2013 1:59 pm

    Seems we agree again, Wally …

    … if people want to blame politics and IR they obviously don’t get marketing … and you (or I) won’t convince them …

    BTW what’s the best warranty you’ll get on a new Holden or Ford?

    Just out of interest I was selling when the Datsun 180B had a six week waiting list … I drove the company demo, a 1200 Coupe (red with chamois seats) and sold a lot of them because I could get quicker sales and they cost the same as a 180B but were CBU (Japanese built) not CKD (Aus built) …

    … a year later I had been offered a zone service manager’s poition … then along came the 200B and I know what the downfall of Nissan Australia was and so does anyone who worked/works in the industry …

  23. Evil Walrus permalink
    May 23, 2013 3:53 pm

    Oh……………..Dear……………………….Oh……………………….Dear

    The Government’s day does not get any better

    No wonder Consumer Confidence is shot to pieces. This lousy Government is presiding over a job market rout

    http://www.smh.com.au/business/2500-jobs-lost-as-cleaner-goes-bust-20130523-2k2vf.html

  24. IPA address permalink
    May 23, 2013 3:58 pm

    Of course I don’t “get” marketing like someone who’s had such extensive experience in the auto industry, but until someone proves his statements wrong I can only go by what Ford’s boss Graziano said in his press conference today. This is the relevant part of his statement: “Our costs are double that of Europe and nearly four times Ford in Asia.”

    The other thing I can use to make up for my lack of knowledge is publicly available facts. Territory sold 1260 units last month, just behind segment leader Toyota Prado on 1276. (Holden Captiva was the best selling SUV all segments on 1640.)

  25. TB Queensland permalink
    May 23, 2013 4:00 pm

    This article has a graph near the bottom of the column and tells it pretty well …

    http://www.news.com.au/business/ford-australia-to-shut-broadmeadows-car-factory-geelong-engine-plant/story-e6frfm1i-1226648895882

  26. Evil Walrus permalink
    May 23, 2013 4:03 pm

    “Our costs are double that of Europe and nearly four times Ford in Asia.”
    Yep
    Just ask BHP Billiton (Olympic Dam shelved) and Woodside Petroleum (Browse Basin shelved). They keep saying the same thing when they shelve projects.

    And Bill Shorten keeps saying they are wrong

  27. TB Queensland permalink
    May 23, 2013 4:06 pm

    Rather than cherry picking and smart arse remaks, ToSY, check the marques that that lead the market … Holden comes second … Ford fifth … then go down the list …

    http://www.caradvice.com.au/229366/new-car-sales-figures-april-2013/

  28. TB Queensland permalink
    May 23, 2013 4:09 pm

    The most successful car in the world is this one … a dictator’s dream …

    http://volkswagenbeetle.goyalive.com/

  29. TB Queensland permalink
    May 23, 2013 4:10 pm

    BTW, the Yank companies were being well and truly trounced by overseas manufacturers until the GFC came along and they got a massive hand out …

  30. TB Queensland permalink
    May 23, 2013 4:14 pm

    GM isn’t the world’s greatest automaker, at least not yet. Its profits still trail those of its two biggest rivals, Volkswagen (NASDAQOTH: VLKAY ) and Toyota (NYSE: TM ) , by a wide margin. But it is doing well, thanks to much-improved products, management that is working to resolve the company’s remaining issues — and the new lease on life it received from American taxpayers in 2009.

    http://www.fool.com/investing/general/2013/03/23/why-government-motors-still-owes-you.aspx

  31. Evil Walrus permalink
    May 23, 2013 4:18 pm

    From TB’s link

    I think this means that tradies might as well buy a 4WD Hilux so they can go beach fishing/surfing with the mates/kids on the weekend or maybe camping.

    Ford Utes don’t take too well to sand

    Pickup 4×2 Segment Winners: Toyota Hilux 4×2 (830 – 24.1%),Ford Falcon Ute (421 – 12.2%),Ford Ranger 4×2 (409 – 11.9%)

    Pickup 4×4 Segment Winners :Toyota Hilux 4×4 (2,102 – 21%),Nissan Navara 4×4 (1,621 – 16.2%),Mitsubishi Triton (1,294 – 12.9%)

  32. TB Queensland permalink
    May 23, 2013 4:54 pm

    Wally, its old fashioned stupidity that markets cars that people with families don’t want … big six and eight cylinder sedan petrol guzzlers are 1980’s … SUV turbo charged diesels are the market leaders …

    Ford and Holden like to think they’re different and “know” the Australian market psyche … obviously they don’t … now … what does Toyota manufacture?

    4×4, AWD, SUV … and smaller cars for the singles … BUT … at a better quality …

    I remember how I laughed when the Hardie 1000 rules were changed to suit the Ford/Holden rivalry in big superchaged V8’s … when the tiny Nissans whupped ’em with turbo chargers!

    Ford and Holden play to a minority of car owners – always have … and its come back to bite ’em on the bum …

    Ford lost me completely with the Pinto fiasco …

  33. IPA address permalink
    May 23, 2013 5:10 pm

    “Ford and Holden play to a minority of car owners – always have”

    Depends on your definition of “minority” and “always”, I suppose. 😯

  34. Tom of Melbourne permalink
    May 23, 2013 5:14 pm

    Note the ABC program a few nights ago, which identified $tens of millions given to the Illawarra for job creation when the steel mill closed.

    Result= waste of money. Even Combet admitted it had missed its objectives.

    Geelong should prepare for the same outcome.

  35. Evil Walrus permalink
    May 23, 2013 5:32 pm

    “Depends on your definition of “minority”……” = Bathurst Bogan Breeders

  36. Evil Walrus permalink
    May 23, 2013 5:38 pm

    “………its old fashioned stupidity that markets cars that people with families don’t want … big six and eight cylinder sedan petrol guzzlers are 1980′s … SUV turbo charged diesels are the market leaders …”
    Yep
    Honda are about to finally sell its CRV Diesel here not just OS.

    Why would a tradie want a 2 seater Ford or Holden Ute to throw his tools in the back of when they can get a well finished reliable Hilux that has 4 seats, plenty of room for tools in the back plus the wife and a couple of kids can go out on the weekends with the surfboards/fishing gear and family dog in the back.

  37. IPA address permalink
    May 23, 2013 5:57 pm

    “………its old fashioned stupidity that markets cars that people with families don’t want … big six and eight cylinder sedan petrol guzzlers are 1980′s … SUV turbo charged diesels are the market leaders …”

    At what point in the past 53 years that Falcon has been manufactured in Australia would have been a better time for Ford to cease its production? Probably about six years ago judging by that graph above. Trouble is it takes at least six years to get a car from the drawing board to the production line, and probably much longer than that to return a profit on intial development and tooling costs. It’s not a very agile industry, time wise.

  38. TB Queensland permalink
    May 23, 2013 6:32 pm

    Probably about six years ago judging by that graph above. Trouble is it takes at least six years to get a car from the drawing board to the production line, and probably much longer than that to return a profit on intial development and tooling costs. It’s not a very agile industry, time wise.

    Probably a decade ago (the Mitsubishi 380 is/was a good car but the market didn’t want it) the message was on the wall before 2005 … now I’m a Mitsubishi Magna fan, drove them from 1990 until the end of last year, five in all … but I like station wagons … guess what … when did you last see a Ford or Holden wagon?

    And your estimation is probably right … but the next iterations (for 2018) on the drawing board, the models we’ll see in couple of years are already being made out of mud … the next year’s models are being machined up ready to go … if you know how to build cars like the Japanese learnt from Demings … Ford and Holden still lag … old a weary machinery and processes …

    In fact Ford almost went out of business in the 1930’s … Henry hadn’t planned on any competition after knocking out 15 million Model T’s … guess what …

    It’s a far more dynamic industry than you may think … if management gets it right … and its about turnover in the car industry … Ford and GMH just aren’t getting the turnover …

    The problem for Australia is twofold …

    … our foundation economy is driven by car manufacturing and house construction … jobs and multiplier effect … (the mining boom is a blip albeit a big one) …

    … and we need the capacity to manufacture in the event of a major global catastrophe …

    I’ve mentioned before that history repeats … and, based on the history of the great Depression … warned to look for the next phase – an upsurge in nationalism … it is happening now, particularly in Europe … and closer to home China/Japan and N. Korea/S/Korea/Japan … Russia under Putin is becoming very dangerous … his support for Assad proves that … those Russian naval bases are very important …

  39. Neil of Sydney permalink
    May 24, 2013 8:01 am

    i was listening to the radio last night and it was stated that all the govt help went into paying higher wages for Ford workers.

  40. Evil Walrus permalink
    May 24, 2013 10:45 am

    If this analysis of the various enterprise bargaining agreements is true then I have no sympathy for Ford workers nor do I think that Ford owes them anything more

    http://ipa.org.au/library/publication/1354745972_document_061212_submission_-_auto_paper.pdf

  41. egg permalink
    May 24, 2013 11:30 am

    ‘I’ve mentioned before that history repeats … ‘

    Busy right now, but I’ll get back to you on that.

  42. TB Queensland permalink
    May 24, 2013 11:31 am

    Wally, this is the other side of the picture …

    The Business, last night … (Ford story commences @ 1:24

    And you probably saw the 7:30 Report where Lee Sales eventually asks, “How stupid do you think the Australian people are?” … the interview starts @ 7:14 but worth watching the background story …

    http://www.abc.net.au/iview/#/view/39074

  43. TB Queensland permalink
    May 24, 2013 11:32 am

    The Business link …

    http://www.abc.net.au/iview/#/view/39066

  44. IPA address permalink
    May 24, 2013 11:37 am

    Walrus, found via your link: FORD AUSTRALIA ENTERPRISE AGREEMENT 2012

    It’s a 125 page PDF, but well worth a look. Mind boggling!

  45. Evil Walrus permalink
    May 24, 2013 11:50 am

    Thanks IPA

    Just had a look at the Index……………………………….How could a payroll department even administer that ?

    Unbelievable………………..!

  46. IPA address permalink
    May 24, 2013 12:05 pm

    Yes, I’d say Unions: Boo! is pretty apt here, although Graziano and Ford would be wise not to actually point to the elephant in the room while they are planning on maintaining an Australian presence.

  47. TB Queensland permalink
    May 24, 2013 1:10 pm

    You obviously have no idea of Awards or EBA’s and how they function … payroll staff are generally administered by the HR Department in large organisations … but as a line manager I still took on any problems, via HR, on behalf of my team …

    … as a line manager in smaller organisation (100 employees) without access to any HR it was my responsibility to ensure my troops were paid correctly … and I made sure they were …

    All my staff had access to the Metal Trades Awards when I worked as either a Service Manager or Production Manager … EBA’s are not complicated to those who work under them … but they do address possible issues in a far more thorough and detailed way than a hand shake and an agreed salaray … the link you provide is more a reference manual than, you need to know what it covers but you don’t commit it to memory …

  48. Evil Walrus permalink
    May 24, 2013 1:18 pm

    “You obviously have no idea of Awards or EBA’s and how they function … payroll staff are generally administered by the HR Department in large organisations … ”

    FFS TB if you want to be pedantic about the titles of “Payroll Department” and “HR Department” then that just shows the shallowness of your argument.

    Seriously………………………shakes head

  49. Tom of Melbourne permalink
    May 24, 2013 2:05 pm

    Most disputes it large manufacturing don’t involve entitlements (pay rate, overtime, leave etc), all that is well automated. It is entered on line by the employee, and electronically approved or queried by the supervisor.

    The time consuming disputes are related to process, stuff like ‘you should have consulted us before changing the colour of the form from buff to yellow’.

    There is plenty of opportunity in that agreement that will promote inefficient, time consuming process disputes. It is inefficient process that soaks up too much time, resources and energy.

  50. May 24, 2013 3:39 pm

    l notice our tea-guzzlers still aren`t learning TB, (unions_boo). Under `free-trade` competing with 10-cents/hour wages it is guaranteed Aussies lose every time, whether worker, producer or manufacturer. Maybe our Tory-kids will have suggestions on where we will be able to get rid of a couple of billion now that Ford and Mitsubishi are out of the picture. We need to find another bottomless pit quick.

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