Ford Plan To Axe 600 Car Workers

The Age

Friday July 13, 2007

By Leo Shanahan and Jane Holroyd

FORD is considering plans to end engine production in Geelong, threatening about 600 jobs and adding to doubts over the long-term viability of large-car manufacturing in Australia.

In a potentially serious blow to the Geelong economy, the car maker is weighing up whether to abandon the local engine operation in favour of an imported V6 that would meet new emissions laws to be introduced over the next three years.

The engine factory has been operating on its Geelong site since 1926, and employs more than a third of the city's 1500 Ford workers.

Demand for Geelong-made six-cylinder engines has been hit by a slump in sales of Ford's flagship model, the Falcon, and its other locally-built six, the Territory, amid high petrol prices and a swing to smaller imported cars.

The Falcon slump has been accentuated by the launch of a new model of the rival Holden Commodore, which has been outselling the once-dominant Ford by almost two to one.

The new Euro IV emissions standard will be compulsory for all new cars under 3.5 tonnes by 2010, and for all new models by 2008. It is believed that one option being canvassed by Ford would involve importing parts for a compliant engine and assembling it in Geelong. However, this would cost more than importing the engine whole.

Ford yesterday declined to confirm that it was considering ending engine production in Geelong after the plans were reported by a car news website, GoAuto.com.au. However, company spokeswoman Sinead McAlary said Ford had told workers it was looking at alternatives.

"We are looking at a range of different alternatives across a number of different areas of our business to ensure we can remain competitive in terms of features and technology we offer and pricing into the future," she said. "Nothing has been decided at this point."

The federal secretary of the Australian Manufacturing Workers Union vehicle division, Ian Jones, met Ford managers yesterday to state workers' fears.

"We put to them quite directly whether or not it was their intention to stop manufacturing an in-line six-cylinder in Australia and replace it with an imported V6 engine. They indicated to us it was a matter they were looking at but had yet made no formal decision on," he said.

AMWU secretary Dave Oliver said there "would be wide-ranging implications for not only the workforce but the community at large" if the plant closed.

Mr Oliver said another option of "tooling up" the factory to build the compliant V6 engine should be favoured and the Federal Government should help.

A spokeswoman for federal Industry Minister Ian McFarlane said the Government understood Ford's need to look at its options.

"The reality is that the market for large passenger cars in Australia is not what it was," she said. "Ford recognises this, and the minister understands that Ford is looking at its options to stay competitive in a very tough environment."

The plant was given $28 million in 2005 under a Federal Government scheme, and an additional $52.5 million in 2006 for research and development.

Geelong Football Club president Frank Costa said change was inevitable at Ford, the club's major sponsor. "As time goes by, things will change and as they get more sophisticated equipment, it does mean jobs will be reduced," Mr Costa said.

Last year the Falcon recorded its lowest sales in 40 years - 42,390, against the Commodore's 56,531 and the imported Toyota Corolla's 46,256.

The gap has grown since the launch of the new Commodore, which outsold Falcon by 5588 to 3206 in June. Ford hopes to close the gap with the launch of a new model Falcon next year.

Ford is not alone in its woes, with Mitsubishi's Adelaide operation facing continuing threats to its survival. Toyota and Holden have succeeded in exporting locally-made cars and engines to keep their operations viable.

© 2007 The Age

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