Ford takes the $34 mil and runs!

I don’t doubt that the extent of this broad business move by Ford Motor Company eludes my lackadaisical grasp of global economics, but it still strikes me as ruthless and utilitarian to a psychopathic degree.

Which isn’t surprising because this describes most business strategy in the post-global economy age, doesn’t it?

After manufacturing cars in Australia since 1925, Ford announced it is pulling out of the continent by October, 2016.

US car giant Ford Motor will shut all its Australian manufacturing plants by October 2016, after more than 85 years of making vehicles in the country.

About 1,200 workers are expected to lose their jobs from the Broadmeadows and Geelong plants, in Victoria state.

Ford said its Australian operations had lost A$600m ($580m; £385m) over the last five years.

The strength of the Australian dollar has made manufacturing more expensive, while sales have been under pressure.

“Our costs are double that of Europe and nearly four times Ford in Asia,” Bob Graziano, the chief executive of Ford Australia, said. “The business case simply did not stack up.”

He added that “manufacturing is not viable for Ford in Australia in the long-term”.

Ford said that it would still import its cars into Australia.

Leigh Diehm from the Australian Manufacturers Workers Union (AMWU) told ABC News that its members in both sites were “devastated by the news”.

“We will be sitting down with Ford this afternoon working our way through and talking to our members on the two sites over the coming months and years.”

Mr Graziano said Ford had looked at all other possibilities before making this “difficult” announcement.

The Australian dollar has risen 29% against the Japanese yen over the past year, making Australian products much less competitive.

That has had a negative impact on the local car manufacturing industry as a whole.
Last year General Motor’s local subsidiary, Holden, announced it would cut 500 jobs from Victoria and South Australia because of slowing demand and the high dollar.

Ford is abandoning a manufacturing center and a generational blue collar legacy for a pittance. Ford Australia has churned out automobiles for almost a century, but because of a string of 5 consecutive years posting an annual average net loss of $116 million, they are bailing. Australia’s rising dollar is the main scapegoat. It has left Australian manufacturing too costly to export (and import). I wonder how Ford arrived at this decision.

Much of Ford’s prestige has been extrapolated from its global presence in the UK and Australia. Ford’s domestic offerings have been historically restrained due to oppressive EPA requirements and other nanny state safety boundaries, but its offerings in Australia have been unabashedly wild and cutting edge. The Kiwi version of the Ford Falcon is a hot rod that would make American bureaucrats blush.

What I thought most hilarious was a note near the end of the story.

“The Australian government last year announced a $5.4bn fund to support the car industry, including $34m to Ford to continue production until at least the end of 2016.”

So apparently, Australia tried to shush Ford for a few years, but Ford still sucked up the futile gift down to its ragged deadline, and still dumped Australia. The same Ford that has earned “respect” in its Corporate Motherland for eschewing government bailouts.