Ford Australia has confirmed that it’ll be shutting down its operations from October 2016, costing nearly 1,200 jobs in Victoria.
Ford Australia boss Bob Graziano made it official in a statement, announcing that the American automaker will close its Broadmeadows and Geelong plants in Victoria after incurring a $141 million after-tax loss from the 2012-2013 year. Over the last five years, Ford’s operations in Australia has lost over $600 million and feels that it is no longer viable to produce vehicles in Australia.
While manufacturing will cease to exist, Ford will continue having a presence in Australia by maintaining 1,500 of its staff in product development roles. Main reasons to close the plants down were market fragmentation, the small scale of the Australian market, and relative production costs.
Before Ford came to the decision that it would have to shut down its Australian operations, the automaker attempted to restructure but its locally-made vehicles continued to make losses while its imported vehicles were profitable. In comparison, Ford’s costs in Australia are double that of Europe and four times more than in Asia.
“We did not leave any stone unturned but even with these assumptions the business case did not stack up,” said Graziano.
[Source: The Australian]
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