Ford US boss reveals reasons for Australian factory axe

[Jason[98.EL]]

interesting read

canada is about the same costings to build a car but they are staying

Originally Posted by the funny little fellow-* JD *

Australia is 'logistically not a good location'

A senior Ford executive in North America has spoken openly for the first time about the reasons behind the closure of the company's Australian manufacturing operations. Ford North America president Joe Hinrichs inadvertently made the revelations while trying to explain why Ford's Canadian factories would survive -- even though they too have a high cost base -- and Australia's could not


“Australia is isolated with an industry of about one million units. Logistically it is not a good location,” Hinrichs told Canada’s The Globe and Mail overnight.

“The combination of the high Australian dollar and isolated location doesn’t make it a good export base and not a big enough total [sales] volume industry to support manufacturing,” Hinrichs said.

“The Canadian situation is a little different than Australia because there is enough volume in the total North American industry to support high-volume plants, which makes up for some of those other issues.”

Ford Australia will close is Geelong engine and stamping plants and the Broadmeadows car assembly line no later than October 2016, axing 1500 jobs in the process. It will bring an end to 90 years of Ford manufacturing in Australia and see the Falcon name -- the third oldest in the automotive world -- become extinct.

But Ford's Canadian factories will survive because they are the doorstep of the world's second biggest car market, North America, whereas Australia had limited export potential due to the high value of the dollar, Hinrichs said. The increasing number of imported cars from low cost countries such as South Korea, Thailand and, soon, Indonesia also weighed on Ford's decision.

“I think we need to look at what’s been going on around the world including in the United States ... look at what the costs are for the next generation of workers coming into the auto industry,” Hinrichs told The Globe and Mail. “We need government support – that by the way, happens everywhere in the world. We need to look for unique Canadian solutions, but at the same time move us forward to an overall more competitive manufacturing cost.”

The revelations from the top levels of Ford management come as Holden has asked its factory workers to take a pay cut and find new efficiencies or risk shutdown. The Holden negotiations are due to end in August. Meanwhile the Australian car industry has welcomed the return of Kim Carr as federal industry minister, following Kevin Rudd's return to the prime ministership.

“In politics you don’t often get a second chance,” Senator Carr said in media statement. “I believe we can take courage from the tenacity with which our firms have weathered the storm. This is not the time to yield. It is the time to renew our commitment to workers and their future and to building stronger management of our firms and modernising our production processes.”