Ford to slash 15 percent of workforce in Australia

MELBOURNE Tue Jul 17, 2012 5:05am BST

A Ford logo is seen on the car maker's booth during the first media day of the Geneva Auto Show at the Palexpo in Geneva, March 6, 2012. REUTERS/Denis Balibouse

A Ford logo is seen on the car maker's booth during the first media day of the Geneva Auto Show at the Palexpo in Geneva, March 6, 2012.

Credit: Reuters/Denis Balibouse

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MELBOURNE (Reuters) - Ford Motor Co's (F.N) Australian unit announced plans on Tuesday to cut up to 440 jobs, or about 15 percent of its workforce, and slash production by almost 30 percent to cope with a slide in popularity of its top model, the Falcon.

Australian car manufacturers have enjoyed solid sales over the past year despite a subdued economy, although Ford's sales have lagged, according to industry figures.

The Ford Falcon was once Australia's top-selling vehicle but now barely makes it into the top-20, hurt by a trend away from large-engine sedans in favour of small cars and sport utility vehicles, including Ford's locally made 4WD Territory.

Ford said it would cut production from 209 vehicles per day to 148 vehicles per day from November 2012 in a response to changing customer preferences, which have driven an industry-wide decline in the sale of large vehicles.

"Implementing this structural change is essential to ensure the longer-term health of the business," Ford Australia President Bob Graziano said in a statement.

He said most of the up to 440 job losses would be from the manufacturing operations in Melbourne and nearby Geelong in Victoria state. Last year, Ford cut 240 local jobs.

Ford said it would shift production to a more profitable mix, including more Territory vehicles.

GOVERNMENT FUNDING

Ford, which has more than 3,000 employees in Australia, in January secured more than A$34 million ($35 million) in funding from state and federal governments to guarantee local production until 2016.

In April, the car maker introduced a four-cylinder Falcon model alongside its six- and eight-cylinder versions, hoping to win back corporate and government fleet buyers after a 24 percent slump in Falcon sales year-on-year.

Ford's market share slipped to fifth place, or 7.9 percent, for the year to June, compared with 9.1 percent a year earlier, according to the Australian Federal Chamber of Automotive Industries.

Ford trailed Toyota (7203.T), General Motors' (GM.N) Holden unit, Mazda (7261.T) and Hyundai (005380.KS).

Ford's Australian subsidiary was founded in 1925 in Geelong and initially assembled Model Ts in a disused woolstore.

Australian car makers have also lost market share as sales of imports have surged, aided by the strong Australian dollar. In April, Toyota Motor Corp cut 350 jobs from its manufacturing plant in Melbourne.

(Editing by Richard Pullin and Muralikumar Anantharaman)

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