Ford Motor has announced to close its Australian car manufacturing plants in October 2016 - after roughly 90 years of production output in the continent. According to The Straits Times, Ford blames a strong currency and other costs that are hitting manufacturers, as Australia is looking to diversify its economy to cushion the end of a mining boom.
Ford Australia will shut its engine plant in Geelong and its vehicle assembly plant in Broadmeadows - both situated in the state of Victoria that will result in the loss of 1,200 jobs. The closure is seen as a further blow to Prime Minister Julia Gillard, whose governing Labor party is trailing in opinion polls ahead of elections later this year.
"Our costs are double that of Europe and nearly four times Ford in Asia. The business case simply did not stack up. Manufacturing is not viable for Ford in Australia," said Ford Australia chief executive Bob Graziano.
He also added Ford had lost AUD$600 million (S$728 million) in the last five years as demand has diverted to smaller imported vehicles built by Mazda and Hyundai.
While PM Gillard reassured her nation that the government wants to make sure Australia will still be a country that makes things and manufactures goods, Opposition leader Tony Abbott called the announcement by Ford a 'black day' and said the government needed to cut taxes to encourage investment.
Ford began its Australian operations by assembling the iconic Model Ts at Geelong back in 1925.
