Ford Australia has pledged to locally assemble vehicles in the country until 2016 and that's it, according to an automotive industry expert, who added the exit of the global carmaker has been a foregone conclusion.
"Ford will still be here selling cars but it will not be manufacturing cars in Australia," PPB Advisory partner Stephen Longley was reported by The Herald Sun as saying on Monday.
All the signs have been apparent: supply chain issues, job cuts and investment difficulties, with Ford even securing a $34-million rescue fund from state and federal authorities earlier this year just to ensure that its Geelong and Broadmeadows factories will keep rolling out Falcon and Territory vehicle models over the next four years.
Mr Longley noted that the industry should have read between the line when Ford had disclosed that it will cap its vehicle production to about 148 units per day or roughly 33,000 cars annually.
That announcement was shortly followed by lay offs that affected more than 400 local Ford workers, which could easily to direct job loss of about 3,000 by the time the company suffers a slow and painful demise, Mr Longley said.
The immediate aftermath would be the elimination of another thousand jobs, mostly from the car parts industry, which would be left to largely depend in the local presence of GM Holden and Toyota.
"There's been no announcements ... the expectation though, is that this will happen," Mr Longley told ABC on Monday.
Ford's eventual departure is only a logical course for a manufacturing firm that has been encountering difficulties both with its export and local markets, with the latter complicated further by slumping demands.
Ford has also struggled to compete with rivals abroad mainly due to the high value of the Australian dollar, economists said.
Mr Longley's view was backed by former Reserve Bank of Australia (RBA) board member Warwick McKibbin, who wrote in an article published by the Australian Financial Review (AFR) on Monday: "The high dollar, the carbon tax and high labour costs are driving rapid adjustment pressures on manufacturing that require Productivity Commission scrutiny."
"Sectors that have rigid labour costs such as the automotive industry find it difficult to adapt," Mr McKibbin added.
With no positive economic prospects in sight, it would be unwise for Ford to invest millions just so its local operations would meet the industry standards as embodied in Australia's new emission standards, its full impact poised to be felt by late 2016.
Should Mr Longley's declarations materialise, Ford will follow in the footsteps of Japanese carmakers Nissan and Mitsubishi, which according to AFR withdrew from Australia in the early 1990s and late 2000s, respectively.
The news came out as Ford recently unveiled its new assembly facility in Thailand and announced the gradual phase out of its manufacturing operations in the Philippines.
The moves were seen as Ford's consolidation efforts of its operations in the Asia-Pacific region, part of which is the likely dismantling of the carmaker's Australian assembly plants.
However, the Victorian Automobile Chamber of Commerce remains hopeful that Ford will not close shop after 2016.
"All the actions which they're taking are obviously designed to make them more efficient and more competitive in a very competitive global market ... and we hope to see it remain in this country well past 2016," the business group spokesman, David Purchase, told ABC today.
In a statement, Federal Employment Minister Bill Shorten hinted that with or without Ford, "manufacturing will continue in Australia and it will continue in Victoria."
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