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Ford to close Australia car and engine plants in 2016

Ford Motor Co. will close Australian car and engine assembly plants in 2016 after almost nine decades of manufacturing in the country.
Ford, the smallest of the country’s three manufacturers after Toyota Motor Corp. and General Motors, will shut its assembly plant in Broadmeadows in northern Melbourne and an engine plant in Geelong to the west of the city, Ford Australia CEO Bob Graziano said.
Both plants are located in the state of Victoria.
Ford, which will continue to import vehicles in the market, has struggled with sliding sales, high costs and a strong Australian dollar.
The timing of the closure is also linked in part to the adoption of Euro 5 emission standards in Australia starting on November 1, 2016, the Australia Financial Review reported.
Ford’s current engine lineup used in the Australian market just met Euro 4 standards, and the Geelong plant would need to undergo a major overhaul to meet the tougher regulations, the Review said.
The closing had been expected given plummeting sales of the Ford Falcon. Ford Australia posted a loss of $290 million last year as Falcon sales fell by 36 percent, the paper said.
Ford has operated in the country since 1925.
The company will try to maintain some of the 1,000 jobs at its research and development division in Melbourne, the Review said.
Australian car manufacturers have struggled as the strength of the Australian dollar has stoked sales of cheaper imported vehicles and cut exports.
Ford has previously committed to make cars in Australia only until 2016 and said last July that it would cut about one in seven jobs from a workforce that then numbered 3,014.
“There will certainly be very large implications for businesses on the supply chain,” said Richard Reilly, CEO of the Federation of Automotive Products Manufacturers.
Jac Nasser, chairman of the world’s largest miner, BHP Billiton Ltd., and former CEO of Ford, told an event in Melbourne last month that the closure of one automaker could spark a “domino effect” in the industry.
“Let’s assume one of the three decide to exit Australia in terms of manufacturing, then you end up potentially with a sub-scale supplier infrastructure,” he said.


