Ford shuts plant and 600 jobs in jeopardy

The closure is creating a new political headache for the Howard Government, over the car industry's future just months from the federal election.

The decision by Ford to stop manufacturing six-cylinder Falcon engines at its Geelong factory, in Victoria, by 2010 and shift to imports will cost 600 jobs.

The Australian understands a further 600 jobs could be at stake at the company's Victorian Broadmeadows plant, as Ford seeks to contract out part of its assembly and fleet maintenance work as well.

Ford's move, after many millions of dollars of Howard government grants, raises questions about the long-term economic future for Australia's car industry, with consumers shifting to smaller, imported cars in the face of rising petrol prices.

The company, however, is expected to argue today that its big impediment is the massive start-up investment that would have been needed in Australia to produce thousands of low-emission engines for the next-generation Fords.

Labor last night accused the Howard Government of failing to respond to market changes by developing new local technology.

Opposition industry spokesman Kim Carr said urgent measures were needed, such as manufacturing four-cylinder engines and fuel-efficient transmissions. Senator Carr also called on the Government to send a delegation to Ford's US headquarters in Detroit, to get an understanding of the firm's global restructuring plans, of which the Geelong closure is a part.

Brendan Sexton, 43, who has worked as a semi-skilled machine operator since he was 20, said the 600 Geelong workers were on tenterhooks.

“The Ford Motor Company needs to come clean,” he said. “We want to know what our future is. We want to know if the Ford Motor Company is going to continue investing.”

Mr Sexton said one job loss at Ford meant two others lost outside the company in the Geelong area. Many workers also had young families to feed and mortgages to pay. “In some cases it will affect both wage earners in the family,” he said.

Industry Ministry Ian Macfarlane said he accepted the seriousness of Ford's decision and pledged help for those displaced.

But Mr Macfarlane insisted the Government had offered huge support to the car industry with its $7.3 billion assistance plan over 15 years. He said Ford had benefited from an extra $28million to improve fuel efficiency in 2005, and a special $52 million grant last year to develop the next generation Falcon and a pick-up truck for export.

Accusing Senator Carr of failing to understand the car industry, Mr Macfarlane said Ford's decision was related solely to the cost involved in producing big numbers of the new V6 engine. He told The Australian, “They need to be able to produce hundreds of thousands to be efficient.”

So far the Government has resisted industry pressure to water down its planned tariff cut from 10 per cent to 5 per cent in 2010. Mr Macfarlane said any decision on reversing the tariff cut was 'premature,' but would be considered next year as part of a planned review.

Ford spokeswoman Sinead McAlary confirmed a decision on Geelong's future was imminent, with employees and then the market to be officially told.

Ford's move is likely to prompt a market rethink by competitors General Motors, Toyota and Mitsubishi, although industry figures are heartened by GM's commitment to new investment at its Fisherman's Bend plant.

The Australian Manufacturing Workers Union last night vowed to fight to save as many jobs as possible at Ford, and lobby for developing new products for the changing car market.

Vehicle division union chief Ian Jones said, the Geelong engine-making closure would leave behind 600 workers at its stamping and iron foundry areas, and keep alive parts of the research arm.

Victorian Premier Steve Bracks said he had been assured Ford had a long-term future in Victoria, the Government would continue to assist the company to keep all its local plants open.

“We would like to see every person that's currently employed at Ford employed in the future, and as important is the long-term security of Ford,” he said.

Mr Bracks said he accepted the assurances of Ford Australia president Tom Gorman that the company had a long-term future in Australia, in Geelong and Broadmeadows.

Tim Piper, Victorian director of the Australian Industry Group, said it was important to the state's economy that Ford maintain its operations in Victoria.

Former mechanic Jim Mock spent 16 years running a successful Ford dealership in Mildura, in northwest Victoria, before opening up his own workshop, which specialises in developing new parts for late-model Ford Falcons. “The Ford product has always been so good, much better than anything else in Australia and as good as anything else in the world. But the company itself is run by the sales and marketing people instead of being driven by the ideas of the researchers and developers and the engineers,” Mr Mock said.

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