I just heard on the Fox financial news that FoMoCo was closing all there plants in Australia by 2014 because it cost twice as much to build a car there as in Europe or America.
well, that sucks. how much is it going to cost to make a car in America and/or Europe and ship it to Australia.?.
Shipping apparently isn't the biggest problem. It will be jobs lost. I don't know if they have unions in AUS, but the plant closings will trickle down the pipe to include dealerships closed and their employees, their suppliers, and related industries and businesses. It will be a major hit to the job market during hard times.
just like it was going to happen here if GM hadn't become Government Motors for a while. One of the Chrysler Corporations biggest regrets in the Iacocca years was shutting down production and sales in Europe. I don't know how the car industry has been doing in Australia, but is it really so bad that Ford is willing to make a decision they may have to regret later on?
Yeah it is that bad - Ford Australia makes one car with less than half a dozen variations of body - Wagon, Sedan, LWB and Ute. The rest of Ford Australia cars are imported from US or Europe. The only car Ford Aus make is the Ford Falcon which fits squarely in the large car market. Last year they sold a total of 20,000 units which is 1/3rd of the number they were selling 10 years prior. Keeping in mind a lot of the earlier years were plumped up with Taxi and Government sales. Alas these days the government now have to be seen to be green and buy smaller or more economic vehicles like Euro Diesels. Same with a lot of Taxis downsizing to smaller vehicles and in a lot of cases to Hybrids. (well this is certainly the case in New Zealand who gets almost the same vehicle market as Australia) Ford Australia do not sell the Falcon outside NZ and Aus which to me is a little short sighted - but it could be what the world market chooses? GM Australia (Holden) still struggle but have a lot of Government sales to the Police and fleet vehicle buyers. I'm not sure why they choose GM over Ford but it could be a raft of reasons I could not even speculate on. To boost GM Australia's sales they also sell their large car around the world in UK as a Vauxhall, China and Bahrain as a Chevy and in the US as a Pontiac. Unfortunately this is not an all that educated post - but it is my understanding of the situation from being in the NZ motor industry for 15 years till the mid 2000's - though I have been out of it for 8 years now. Perhaps may help?
The last time Ford ever made big money in Oceania was perhaps through Model T sales. Since other automakers entered the market, Ford has become insignificant. Any claim that Australian workers cost too much is the usual propaganda spewed from biased media, if you compare wages in Australia with those in Britain. The real reasons are logistic and rationalization, partly due to Ford's investment in China which is a current outsource location for western automakers. Due to Oceania being sparse populated, the market for Ford is virtually insignificant and for it and GM is their presence there purely symbolic. Ford's operations are more profitable in Europe, because the market is bigger and because of the close proximity between plants, Components can be produced in separate locations and assembled in one location not too far away. The following graphs shows the number of employees at each location and what is done there. According to this graph, Australia is insignificant. You know, if barges had to tank their diesel fuel where we would have to, we might not ever see any Made in China anymore:
Costs It appears to be getting pretty expensive down in OZ these past few years. Word is minimum wage is 18.00 per hour?
Part of the issue may be regulations, I have known for some time that GM Shipped US made engine to Holden to Power the V-8 and V-6 Commodore's. But I recently found out if the car was destined for sale in Australia they had to ship the engines in partially assembled "kit" form. Incuring added packaging, shipping and assembly costs for the Australian Market. If the car was for Export then they can install a full US built engine. And I have been told by GM that the Australian unions are much stronger than the UAW. I do not know that to be a fact though.
The unions there could only be stronger, since there wasn't ever a union-busting campaign in Australia of the magnitude of that going on in Detroit. Australia has domestic content regulations which require domestic manufacturers to produce a certain percentage of components in Australia. I suppose, having domestic employees assemble an engine qualifies as domestic production
