The announcement that Ford will cease car manufacturing in Australia after eighty seven years is a pointer to the termination of the car industry in this country. We have seen many brave ventures close their doors as this industry has concentrated manufacturing in Victoria and South Australia, but a Ford spokeman said it all when he commented that Ford can make cars at considerably lower cost in both Europe and Asia. For a long time, the Australian car industry has been propped up by taxpayer funded subsidies.
Victoria will take the big hit with Ford dismissing 1,200 employees in Geelong, but the ripples will spread wider. The industry estimates that a further 2,500 jobs will go in car parts manufacturing companies as they suffer economy of scale decreases in orders. The flow on effect will be lower production runs - and a consequent increase in manufacturing costs. Spread across Australia, motor parts manufacturing encompasses over fifty important companies that contribute to the national jobs pool.
Holden has admitted that it can not guarantee it's future in Australia and it's demise seems inevitable. That leaves Toyota in an untenable position as far as Australian made componentry is concerned, and that is a gap that can not be bridged by imports. It is an inescapable fact that the Australian home market for new cars is just too small and our cost structure makes export manufacturing here unviable.
The big car manufacturing companies are hard headed people. To survive they need to source their product from the cheapest possible source - and that works against Australia. That means that politics enters the equation. National pride and the jobs this industry provides are a big incentive for the government to pour more taxpayer dollars into subsidies to keep the last two manufacturers churning out cars - but that is only postponing the inevitable.
When Ford closes it's doors in 2016 - the countdown to becoming a car importing country without local manufacturing will be under way !
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