$1 billion betrayal

24 May 2013
, CarsGuide
$1 billion betrayal
Ford has received $1.1 billion in state and federal handouts since 2000.

Ford slammed the door on its Australian manufacturing business -- and 1200 jobs -- by email, after accepting a total of $1.1 billion in taxpayer cash over the past 12 years.

The final death knell was delivered by the motoring giant's Detroit board to the email inbox of Ford's Asia-Pacific president, Dave Schoch, on Wednesday night. Workers were in tears when told yesterday that the Geelong and Broadmeadows factories would shut down in October 2016.

And there are fears another 2500 jobs will be lost in the car parts supply industry. Ford announced a $141 million loss yesterday, bringing the total red ink to $600 million over the past five years.

The car giant's Australian president, Bob Graziano, said Ford had crunched the numbers and not even a gold-plated government bailout would have saved the manufacturing jobs this time. He admitted it was "difficult news'' for staff, but added: "They're professionals and I think they were quite appreciative that I lived up to my commitment to tell them before we told anyone else, and as soon as the decision was taken.''

Ford has received $1.1 billion in state and federal handouts since 2000 -- and the taxpayer cash continued yesterday with $51 million pledged to retrain sacked workers and support suppliers.

Prime Minister Julia Gillard said it was a "distressing day'' and called on Ford to make a "significant contribution'' to a retraining fund. Opposition Leader Tony Abbott called it a black day for manufacturing, while AMP chief economist Shane Oliver said yesterday could well be remembered as the day the car industry began to die in Australia.

Mr Schoch forwarded the email from Detroit bosses advising of the closure of Ford's manufacturing plants to Mr Graziano from the lounge at Melbourne's Tullamarine Airport, while he was waiting for a flight back to Shanghai after meeting with federal Industry Minister Greg Combet.

He had warned Mr Combet that the company and its Broadmeadows and Geelong plants were under pressure, but the bullet was delivered to workers at 9am yesterday in the canteen. Mr Graziano said making cars here was four times dearer than in Asia and twice as expensive as in Europe.

Last year Australia imported 171,000 vehicles from Thailand, the second-biggest source of new vehicles after Japan. In return, Ford Australia exported just 100 Territory SUVs. The Australian market has been flooded with cheaper imported cars as the Australian dollar has soared.

The Australian Manufacturing Workers Union warned Ford's cuts could cause another 2500 job losses at suppliers. Ford's closure will also put pressure on the future of Holden and Toyota's local manufacturing, but both companies said yesterday they were committed to their local operations.

There will be 650 jobs lost at Ford in Broadmeadows and 510 lost in Geelong. But the engineering centre will remain, keeping 1500 jobs at Ford Australia. Geelong's economy is expected to suffer with the closure of a major employer, which opened there in 1925.

AMWU vehicle division national secretary Dave Smith said he was in shock. "This is a company that has been here 80-odd years and employed hundreds of thousands of Australians over that time,'' he said. The Ford Falcon badge will be retired when the factories close in October 2016.

Legendary Ford V8 racing driver Dick Johnson, linked with the Falcon brand for decades, said he was extremely disappointed. "It is a sad day -- but at the end of the day everyone is in business to make money,'' he said.

But the company's historic sponsorship of the Geelong Football Club will continue. Ford will continue to produce 148 cars a day until it closes its doors, unless demand drops further.

Extra reporting by Stephen Drill.

This reporter is on Twitter: @JoshuaDowling