Dump Ford before it dumps us

While having lunch at the Jam Corner cafe on Palmer St, South Townsville on Sunday, I found my gaze constantly drawn over to Dean St when I heard the distinctive sounds of large V8 engines in big Aussie cars coming over the bridge from town. The V8 super cars race was just on the previous weekend, and I think the local lads were still excited by the high-octane action and were driving around town emulating their heroes.

It made me think that the future of the Australian car industry would be assured if the rest of Australia shared the enthusiasm of the local lads for well-built cars with powerful V8 engines. But alas no, as tastes have changed and people have responded to higher fuel prices, and Corollas and little Mazdas and VWs have taken vital market share from the Commodore and Falcon.

Ford is in a very bad state, and astute commentators have observed that Ford is the next Mitsubishi – i.e. the next car manufacturer that will abandon Australia. But still the Government refuses to cooperate with the inevitable, as evidenced by the federal Government’s response to Ford’s decision to cut production and jobs yesterday. According to a report in APN papers (Ford ‘need to restructure production’):

FORD Australia has blamed motorists’ desires for more fuel-efficient cars for the loss of 440 jobs at its Victorian car factories.

The company’s restructuring will see the number of vehicles produced at the Victorian plants fall from 209 to 148 a day.

While the job cuts, which will take effect late this year, were blamed on changing consumer habits, it comes just six months after the Federal Government gave the company $34 million to protect jobs.

But Industry Minister Greg Combet would not be drawn on whether the car industry subsidies were a success, instead pointing to changing dynamics and the high Australian dollar hurting the manufacturing industry.

“Ford has made it very clear to me that their decision is due to the company needing to restructure its production in response to changing consumer preferences, away from larger cars towards more fuel efficient vehicles,” he said.

In my view, we need to accept that Ford will dump Australia sometime in the next five years and stop pretending that the company is just adjusting to new market conditions.

Previous posts of mine on the car industry include:

Recommended reading on the car industry

Time to cut our losses on industry assistance

If Holden is so good for the economy, why does it need $275M more from taxpayers?

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