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Ford further job cuts


The Howard Government is under pressure to dole out billions of dollars of new aid to Australia's car-makers, in an urgent review of industry assistance prompted by Ford's decision to close its Geelong engine manufacturing plant.

The car industry is under siege from cheaper imports and a high Australian dollar, yesterday urged the Government to undertake a policy rethink and provide extra funding to keep local manufacturers afloat.

Andrew McKellar, chief executive of the Federal Chamber of Automotive Industries, said car-makers wanted to renegotiate the rest of a $7.3 billion government support package for Ford, General Motors, Toyota and Mitsubishi, due to expire in 2015.

“There is a case for adjusting the policy as soon as possible with more funding to offset the effect of the dollar on competition from imports,” Mr McKellar said.

But Industry Minister Ian Macfarlane denied the Ford closure imposed any urgency, and declined to move forward an industry review next year.

Mr Macfarlane also rebuffed claims that the Government had failed to respond to changes in the car market, saying Ford had acted to gain greater efficiency from high-volume production it could achieve overseas.

As reported in The Australian yesterday, Ford confirmed it would cease production of six-cylinder Falcon engines at its Geelong factory in 2010 with the loss of 600 jobs.

The company will import Duratec V6 engines from the US for all locally made Falcons, Falcon Utes and Territory models.

Mr Macfarlane said a $24million fund would be established, including funding from the Victorian Government and Ford, to offset lost investment and jobs at Geelong.

He said he hoped Ford could still undertake some engine assembly in Australia.

Opposition industry spokesman Kim Carr predicted further job losses and accused the Government of a “missed opportunity” to invest in hybrid or diesel cars.

Ford Australia president Tom Gorman said the company had considered alternatives but had to remain competitive. Mr Gorman said consumer behaviour had changed, as demand for large cars fell and cheaper imports were more popular.

Ford would make an announcement soon about increasing capacity at its other Victorian plant at Broadmeadows, he said.

Business and union leaders warned thousands more jobs were at risk as the ramifications of the Ford engine plant closure were felt across the Geelong region.

ACTU president Sharan Burrow said Ford's decision could spell the potential loss of 3000 jobs because of the flow-on effects of a downturn in the local car parts and services industries.

Victorian Premier Steve Bracks urged the Howard Government to reconsider its planned 5 per cent tariff reduction on imported cars, due in 2010, in an effort to help the domestic car market.

“We believe, if you look at what's happening worldwide, where we don't see the concurrent reduction in the tariff barriers of other countries, that there is a strong case to put to have a pause on that tariff reduction and to not implement that by 2010,” he said.

Automotive industry expert Evan Stents said a positive outcome from Ford's decision was that the parent company continued to see Australia as its engineering and design centre for large rear-wheel-drive cars.

“We're heading towards more global platforms and if Ford Australia can continue to be relevant in the production of rear-wheel-modelled cars, and producing them out of Australia, that's probably a more important bigger picture to get out of all this,” said Mr Stents, lead partner with law firm Hunt and Hunt.

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