Ford to slash 350 jobs

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From the Age.

FORD is set to cut up to 15% of its manufacturing workforce in Australia, with hundreds of jobs to go at its Geelong and Broadmeadows plants later this year, as a slowing economy and high petrol prices hit sales of big cars.

News of Ford's cutbacks emerged after multinational Cadbury-Schweppes yesterday announced hundreds of local job losses, and as other leading Australian companies reported falling profits and worsening conditions across the economy.

Ford spokeswoman Sinead McAlary confirmed last night that the company was planning to cut production and shed workers in response to falling demand for its six-cylinder cars, and in anticipation of a further deterioration in the economy.

"We expect the market to soften further from this month onwards," she said.

The Ford job losses, expected to number between 300 and 350, are to start from mid-November. They will be in addition to 600 jobs to go when Ford's Geelong engine plant closes in 2010.

Unions warned the latest move could have a serious flow-on effect on the local car parts industry, threatening more jobs.

The Ford plan is the latest in a series of blows to the local car industry. In June, Holden said it would stop making four-cylinder engines at Fishermans Bend in Melbourne by the end of next year, affecting about 500 jobs.

Last week, the Bracks review of the automotive industry recommended a halving in tariffs on imported cars to 5% by 2010, despite fears of more job losses.

Ms McAlary said production at Ford would be cut by 20% to 25% - implying a reduction of up to 18,000 vehicles from the 73,000 cars the company made in Australia last year - as part of a strategic response to the problems facing the industry.

She said the cuts would be spread across the company's three locally built models, the Falcon, Falcon Ute and Territory.

Ford has been hit by stagnating sales of its Australian six-cylinder models, as high petrol prices and other forces have prompted a shift in consumer tastes to smaller and imported cars - including Ford imports such as the Focus

The locally built Territory has been additionally affected as the model has aged, with sales dropping to just 1028 last month, down from 1555 in July last year.

The new model Falcon, launched earlier this year, has achieved higher sales and market share than the previous model, but remains well behind rival Holden Commodore in the sales race, and both are competing for a shrinking large-car market.

But Ms McAlary said Ford was set up for a "really good future" in Australia, with production of the four-cylinder Focus to start by 2011, adding about 40,000 cars to annual output and making Ford the only local maker with a small car in its line-up.

Australian Manufacturing Workers Union state secretary Steve Dargavel said the Ford job losses would flow through to component suppliers. He called for a freeze of car tariffs at 10% if Australia was to maintain an automotive industry. "To deliver that we call on Kevin Rudd to announce that the tariffs of 10% (on cars), which is already among the lowest in the world, will not be further reduced."

AMWU vehicle division federal secretary Ian Jones said the Falcon had been selling "very well at the moment" but Ford were "taking hits" from the performance of the Territory. "The industry is in a difficult situation at the moment," he said.

Federal Industry Minister Kim Carr said Ford's announcement was probably related to a drop in new car purchases by companies for their fleets.

"The Government is paying close attention to the recommendations of the Bracks automotive review and will issue our response shortly," Senator Carr said in a statement.

"The Government is optimistic that the future of the automotive industry will be bright if the right investment decisions are made now."

A Victorian Government spokesman said any job losses would be regrettable and the Government was talking with Ford and other makers about production cuts. But he said Toyota's decision to build the hybrid Camry in Melbourne indicated a "robust" industry