Ford has announced that it will close its Geelong and Broad Meadows plants in Australia in October 2016. It has attributed the move to high exchange rates, high production costs, mounting losses and declining market. The American automaker’s foray down under began 91 years ago when it setup shop outside Melbourne to assemble the ‘Model T’ and since then has been churning out almost all versions of Ford’s cars in RHD setup.
The Australian arm had reported a loss of 141 million AUD (Rs 76 Crore) for 2012 and has suffered total loss of 600 million AUD (Rs 323 Crore) over the last five years, making an unfortunate case for the shutdown.
The move will see over 1200 people lose their jobs and is also expected to affect the companies that supply Ford Australia with parts and components. However, reports suggest that they also have contracts with other manufacturers like Holden and Toyota, so the extent of damage will be far lesser for them. The state of Victoria is also expected to suffer from the shutdown as both the Ford facilities are major contributors to its revenue. Ford has also said that despite closing the factories it will continue to give full support to its 200 odd dealerships across the country.
Ford has said that after 2016 it will only import vehicles into Australia and these are expected to be only the ones based on their global DNA like the EcoSport, Fiesta and Focus. This means that the legendary Falcon sedan that has defined the Australian motoring scene as well its motorsports since its launch in 1960 will retire into the Australian sunset leaving behind a rich motoring legacy.
With the closing of the plants, the production focus will move to facilities like India and Thailand where the cost of doing things (making cars) is far cheaper and more cost effective. This is very similar to how major car production hubs are moving away from the developed European countries to ‘less’ developed nations.
