IN a major shock to Australia’s car industry, Ford announced yesterday it will be closing its Geelong engine plant by 2010, with about 600 jobs to go.
The giant car maker will scrap local engine operation in favour of an imported V6 engine designed to meet new emissions laws to be introduced over the next three years.
While Ford is struggling to get out of the red in the US, Tom Gorman president of Ford Australia emphasised its other 4,500 local workers would not be affected.
However, the engine plant’s closure is expected to a have a major impact on the region with an estimated three jobs affected in subsidary companies for every job lost.
The engine plant has been operating on its Geelong site since 1926, and employs over a third of the city’s 1500 Ford workers.
The new Euro IV emissions standard will be compulsory for all new cars under 3.5t by 2010, and for all new models by 2008.
Gorman said the company’s new Falcon, due for release in March 2008, will initially be powered by the existing six-cylinder that has been built in Geelong for almost 50 years. But by 2010, the Falcon and Ford’s SUV, the Territory, will be powered by the imported US-built 3.5L V6 engine.
In recent times, the Falcon has suffered from a major slump in sales amid a swing to smaller imported cars as petrol prices have risen.
In 2006, the Falcon recorded its lowest sales for 40 years — 42,390, against the Commodore’s 56,531 and the imported Toyota Corolla’s 46,256.
Industry minister Ian McFarlane has made it clear the Federal Government will not get involved, saying the automotive industry is facing challenging times in today’s highly competitive domestic car market, and Ford is no exception to this.
However, the Federal and Victorian governments announced they would provide $24m to limit the fallout from the plant closure by encouraging other businesses to expand and create new jobs in Geelong.
In 2005, the federal government gave the plant $28m, with an additional $52.5m in 2006 to assist in R&D.