ROB TAYLOR AND LINCOLN FEAST CANBERRA — Reuters Published
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ROB TAYLOR AND LINCOLN FEAST
CANBERRA — Reuters
Ford Motor Co. will shut its two Australian auto plants in October 2016, blaming a strong currency and costs that are hitting manufacturers just as the country looks for other sectors of its economy to cushion the end of a mining boom.
Ford Australia will close its engine plant in Geelong and its vehicle assembly plant in Broadmeadows, both in Victoria state, with the loss of 1,200 jobs, Ford Australia chief executive Bob Graziano said on Thursday, the latest election-year blow to the struggling Labor government.
“Our costs are double that of Europe and nearly four times Ford in Asia,” Graziano said. “The business case simply did not stack up. Manufacturing is not viable for Ford in Australia.”
Ford’s decision to close its local production highlights the challenges the country faces as a near decade-long mining boom begins to fade. Policymakers hope other sectors of the economy such as manufacturing, construction and retail will start to pick up the slack, but evidence has been scant so far.
The Australian dollar has traded above parity with the U.S. dollar for most of the past two years – it fell to about 97 cents only this week – making it more difficult for local manufacturers to compete globally.