Despite a history that traces back to 1925, when the company started producing the Model T in Australia, Ford will cease manufacturing vehicles such as the Territory SUV and Falcon saloon in 2016.
Despite selling as many as 75 000 Falcons ten years ago, the demand for the former Australian market staple has steadily decreased to the point that the Blue Oval hasn’t even managed to scrape 20 000 sales of the Falcon in a year. Ford Australia isn’t alone in its struggles. General Motors’s subsidiary Holden has had the same issue with the Falcon-rivalling Commodore.
Critically, Ford’s Australian division is the smallest of the local manufacturers – the others being Holden and Toyota – and has suffered at the hands of the high cost of manufacturing in the country. In the last five years Ford Australia’s losses have totalled $580 million (approximately R6 billion ZAR).
According to Ford Australia CEO Bob Graziano, the cost of manufacturing Down Under is roughly twice as expensive as in Europe.
Despite the news, updates to the Falcon and Territory will go into production Down Under in 2014 thanks to funding from the Australian government. Eventually, a front and all-wheel drive global platform will replace the Falcon with some other SUV to substitute for the Territory, but those models will be imported, naturally.
The company’s Broadmeadows assembly plant and Geeling engine plant, both located in the state of Victoria, will be closed – resulting inthe loss of 1 160 jobs. Of the 3 000-strong Ford Australia workforce, only about a third of that number will be retained at the remaining R&D and product development facilities.