Government won’t offer further assistance to auto industry, despite Ford cuts

Last week, Ford Australia announced that it would be cutting 400 jobs, which will be split between plants in Melbourne's north and Geelong. Paul Bastian, the national secretary of the Australian Manufacturing Workers' Union (AMWU) called it a “kick in the guts” for employees and their families, while workers themselves were in a state of shock.

According to a recent media reports (The Australian, SBS, WA Business News, all via AAP newswires), Ford worker Medhad Khalifa said employees thought only about a third of the number of jobs reported would be cut (about 130 jobs).

He summed up the feeling among his fellow workmates outside a Ford assembly plant in Melbourne, stating, “We heard before they would cut some people but not this massive number. Actually everyone is shocked. No one believed it until now.”

In spite of the disbelief among workers, government officials claim the jobs cuts are not as severe as they could have been. Prime Minister Julia Gillard stated that if the government hadn’t entered into a $5.4 billion deal earlier this year with the auto industry, job losses could have run into the thousands.

In January, Ford received a $103 million package for a production upgrade from the Victorian government, the federal government and its parent company in the US.

In defending the administration’s decision not to offer further financial assistance, Federal Industry Minister Greg Combet reiterated that the government has a $5.4 billion commitment to the auto industry that extends to 2020.

Bob Graziano, president and chief executive of Ford Australia, said cuts were being made because of slowing sales of large cars, which have continued to decline over the last decade and haven’t rebounded as expected.