The Australian car industry has been in a bit of a crisis for the last few years, and uncertainty over its future has been rife. Today, however, the death knell sounded for Ford's Australian operations: come 2016, Ford won't make cars in Australia anymore. That means the death of the Ford Falcon in Australia within the next three years.
Ford Australia boss Bob Graziano broke the news to factory workers in Victoria this morning, later telling the media that the decision to make cars in Australia is an expensive and unsustainable one.
Losses for this year total $141 million after tax, which puts the losses for Ford Australia over the last five years at around $600 million. Clearly, something had to give.
The Ford Australia boss added that the cost of doing business in Australia is twice the cost of doing business in Europe and four times the cost of doing business in Asia.
Ford will shutter its two major component manufacturing plants in the Victorian suburbs of Broadmeadows and Geelong in October 2016, with 1200 jobs set to go. The auto-maker says that it will explore the potential for redeployment of skilled workers, but the opportunities will be slim.
The decision to close the factories and cease production in Australia "was not made lightly", according to Graziano, and all other alternatives had been exhausted.
The shuttering of the Ford plants in Australia means that the iconic Ford Falcon will be retired come-October 2016. Get ready for a Falcon-less Australia.
For what it's worth, the government poured $35 million into Ford's Australian operations late last year to prop up the auto-maker here and create 300 new jobs. As we understand, Ford will still be taking that money.
Despite the fact that Ford won't make cars here in Australia anymore, it's still promising to have a large commitment to Australia via an expanded service program.
It's setting up a Customer Experience team to improve sales and after-sales service.
Ford Australia currently produces the Falcon, Falcon Ute and Territory cars, which Graziano has said aren't exactly selling well in the country. Imported cars, however, are selling quite well, meaning that Ford will increase the number of new vehicles available by 30 per cent by 2016, so expect to see more cars like the Ranger, Focus and the new Kuga.
Our friends over at Business Insider points out that the Ford announcement comes a day after Holden unveiled the VF Calais, a model it says represents the future of Australian-backed motoring. I predict that we'll see a lot of "true blue" advertising coming out of Holden in the next few years.
Would this news put you off buying a Ford?