Ford to cut Australian manufacturing in 2016

Ford Motor Co., saddled with high costs, falling sales and financial losses, will close Australian car and engine assembly plants in October 2016 after almost nine decades of manufacturing in the country.

Ford, the smallest of the country's three manufacturers after Toyota Motor Corp. and General Motors, will shut its assembly plant in Broadmeadows in northern Melbourne and an engine plant in Geelong to the west of the city, Ford Australia CEO Bob Graziano said.

Both plants are located in the state of Victoria and employ about 1,200 workers.

Ford, which will continue to import vehicles through more than 200 dealers, has struggled with sliding sales in a fragmented market, high operating costs and a strong Australian dollar.

It has lost nearly 600 million Australian dollars ($578 million) in the country over five years, according to a statement issued Thursday in Australia.

"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 said it will continue with plans to update the Falcon, Falcon Ute and Territory SUV, which are assembled at the Broadmeadows site, in 2014.

The timing of the closure is also linked in part to the adoption of Euro 5 emission standards in Australia starting on Nov. 1, 2016, the Australia Financial Review reported.

Ford's current engine lineup used in the Australian market just met Euro 4 standards, and the Geelong plant would need to undergo a major overhaul to meet the tougher regulations, the Review said.

The closings had been expected given a 36 percent drop in sales of the Ford Falcon, a mainstay since 1960, last year, the paper said.

Ford has operated in the country since 1925, when founder Henry Ford first began building Model Ts in the country.

The company will try to maintain some of the 1,000 jobs at its r&d division in Melbourne, the Review said.

Australia is one of four product development hubs for Ford's global operations.

Acquired from Automotive News

Ford to shutter Australia car, engine plants in 2016

By David Phillips of Automotive News