Ford Australia to close two plants in 2016 due to high costs

Article by Anita Panait, on May 24, 2013

Ford Motor Co. will close two sites in Australia in October 2016, no thanks to a strong currency and high costs. Ford Australia will shut down its Geelong engine plant and its Broadmeadows vehicle assembly plant, both located in Victoria state. According to Ford Australia chief executive Bob Graziano, the closure will result to the unemployment of around 1,200 people.

Ford has been operating in Australia since 1925. Employing over 3,000 workers, the carmaker produced 37,000 vehicles in the country in 2012. Ford Australia has been struggling against slumping demand, increasing costs and a strong Australian dollar. Graziano remarked that Ford Australia’s costs are double that of Europe and nearly four times Ford in Asia.

He quipped that the “business case simply did not stack up,” making manufacturing not viable for Ford in Australia. Ford’s decision to shut down its Australian vehicle and engine production underscores the challenges the country is facing as a mining boom starts to end.

Policymakers are currently looking for other sectors like manufacturing, construction and retail to cushion the effect of fading mining boom. Likewise, the Australian dollar has been trading above the US dollar for most of the past two years, making it more difficult for local companies to compete globally.

According to Graziano, Ford posted a combined A$600 million ($581 million) in losses in the last five years in Australia, including A$141 million in the previous fiscal year. He attributed the dismal results to growing consumer preference for smaller imported vehicles produced by Mazda and Hyundai. [source: ford]

Topics: ford, australia

If you liked the article, share on:


Login or Create new account to add a comment!


So, it is official! The new Honda Clarity FCV has the longest verified range of any zero-emissions vehicle currently on the road in the United States. One of the main...
by - October 27, 2016
Many have been anticipating Mercedes-Benz Vans’ newest luxury pickup truck, the X-Class. While Mercedes-Benz has yet to reveal the official production version of the X-Class, it was kind enough to...
by - October 27, 2016
We’ve seen quite a lot of intriguing stories in the age of Internet (where the most interesting part was revealed before the story unfolds). Some are from movies and novels...
by - October 26, 2016
Many people have long known that the new 2018 RS5 was being developed by Audi AG. Enthusiasts the world over were excited when a prototype was seen running on the...
by - October 26, 2016
It was only recently when BMW officially debuted the new 2017 5-Series Saloon (G30) online. At that time, this range revealed that it had driving dynamics that was the best...
by - October 26, 2016