By on November 15, 2012

Ford and Holden are laying off hundreds of workers at their Australian plants as sales of domestic brands continue to take a beating.

Ford will cut 330 jobs at plants in Geelong and Broadmeadows in Victoria state, while Holden is cutting 170 jobs in Adelaide. Ford and Holden have committed to keeping their domestic production facilities going until 2016 and 2022 respectively, but the strength of the Australian dollar, high export tariffs and demand for smaller, more fuel efficient cars (rather than the large sedans traditionally built by Ford and Holden) have led to declining fortunes for the two automakers.

Holden is facing its worst sales numbers in nearly two decades, with demand for the Commodore sedan at an all-time low and the Cruze compact facing a tough field including the Mazda3 and Toyota Corolla, which top Australias sales charts. Both Ford and Holden have received hundreds of millions of dollars in government grants over the past year, with many pundits questioning their wisdom as the auto industry’s fortunes continue to sink.

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42 Comments on “Ford, Holden, Lay Off Hundreds Of Workers Amid Slumping Demand...”


  • avatar
    Zackman

    As the old saying goes: “You ain’t seen nuthin’, yet”.

    I feel things are going to get quite interesting in the coming months world-wide.

    • 0 avatar
      hreardon

      I freaking hate to be a downer, but in the past six weeks we’ve started to encounter a substantial amount of push back on pricing from customers. I haven’t seen anything like this since the downturn in 2008, where customers are fighting us over every penny.

      We’ve also seen a lot of customers balk at big capital expenses (big = anywhere from $5,000-$40,000). It’s really driving us nuts right now.

  • avatar
    Pch101

    The Australian domestic auto industry has always been oriented toward largely domestic production. When GM North America stopped bringing in Holden’s captive imports, that left Toyota has Australia’s largest auto exporter.

    Other nations’ import tariffs have really little or nothing do with their problems. Ford Australia and Holden don’t make much that others want to buy. They were protected for decades by import barriers, and they oriented their production around their perception of what Australian consumers wanted. But those are barriers being phased out, leaving them exposed to foreign competition as they never have been before.

    This is very much like the Peugeot situation in France, except the problem is compounded by the rapid appreciation of the Aussie dollar. Ford and Holden’s problems lie with the product and the branding, more than anything else.

    • 0 avatar
      rnc

      I don’t think it was a quality or competition issue, Ford and Holden built what the market wanted until the market didn’t want it anymore, (think US and BoF SUV’s) and shutting down is the economically sound way to go vs. the investments required to change over thier plants for a country of 23 million without export ability due to currency valuation (only sad part is the Falcon/Territory would have made a great platform for the next taurus and explorer, real RWD & unibody (or the foundation for lincoln’s re-birth), and the BoF vehicles (Ranger and Everest) can be built much cheaper elsewhere, even though there’s less of a chance of us seeing those than the falcon/territory.

      • 0 avatar
        Athos Nobile

        I guess it is rather a “perfect storm” of factors:

        1) Lower import tariffs, between 2 to 5% ATM

        2) As a consequence of 1), there are MANY options available, so a “traditional car” is not the default option anymore.

        3) As consequence of 1 and 2, nobody sells more than 50K units of a single model anymore.

        Couple that with the high $$ which certainly hurts the exports (and affects Holden, Ford and Toyota), free trade agreements that benefit mostly one side *cough*Thailand*cough* and you have the table served for what’s happening.

      • 0 avatar
        CJinSD

        I’d add gas being about $5.65 a gallon to that list.

      • 0 avatar
        Pch101

        “1) Lower import tariffs, between 2 to 5% ATM

        2) As a consequence of 1), there are MANY options available, so a “traditional car” is not the default option anymore.

        3) As consequence of 1 and 2, nobody sells more than 50K units of a single model anymore.”

        This is it. Ford Australia and Holden are small, so they need all of the scale that they can get. They could achieve that scale when they could focus on just a couple of platforms and when barriers kept their competition at bay. But that can’t possibly do that now that the market has become so fragmented. It makes no sense to make a unique model that can only sell at such low volumes and modest prices.

      • 0 avatar
        outback_ute

        They don’t build the Ranger pickup in Australia, it is imported from Thailand. It would surely be too difficult to build unibody and BoF vehicles on the same line, otherwise they might have been able to sell more of them, supply from Thailand is still restricted this long after the floods.

        The higher cost of producing in Australia is one of the reasons Ford, Holden and Toyota are left producing large cars here, they all stopped assembly of small cars 15-20 years ago. Holden bringing back the Cruze was heavily funded by the government, and won’t be enough on its own.

  • avatar
    Chocolatedeath

    Whats that you say? Throw a Lincoln Whale Grill on the front of it and redo the interior to ’13 MKZ levels and can you say FLAGSHIP…YES LORD DO IT.

    • 0 avatar
      Chocolatedeath

      Oh yeah and kill the MK-Flex thing. Dont forget to add the all glass sun roof.

      • 0 avatar
        rnc

        The Ford Flex looks like a Lincoln (the Lincoln flex is an worse than the ovaloid Taurus), perhaps make the flex the Continental W model, Lincoln needs to lose its front end styling, If they are really going to rebuild and use some RWD, go more towards the traditional RR/Bentley, flat front (can use underbody covering to make up for resistance) inserted round headlights, Jag type grill (basically alot of the concept everyone loved so much). They could make a Zephyr, Arrow, Continental and Mk IX with what they already have so easily, offer three engine options, base: supercharged. S: Twin-Charged (super/turbo combo) and R: Twin-Turbo, zephyr 2.5 liter 4 cylinders, Arrow 3.6 or 4.0 liter V6 and 5.0 V8 for the Continental make the zephyr and Mk IX off the new Mustang platform, just give the Mk IX a supercharged V8. The Arrow off the Falcon and I’m pretty sure there is a Falcon L model (or territory platform), if not add to the middle of the frame (like the new BMW 6 4 door coupe) for the contintal and for good measure offer a Continental 6.2L with a supercharged 6.2, suicide rear doors and a retractable hardtop and maybe a pierce arrow model with the supercharged 5.0.

        Buy the Bristol name for Europe, Australia and China. Buy whatever the name of the Soviet Union copied Mercedes was for that Market and you have a real line up and the ability to amortize it.

        Also base the next Taurus off the falcon, just call the Falcon a Taurus in US (4 cyl. eco-boost, 3.6 and 3.5 eco-boost, along with a V8 for police fleet only as not to compete with the arrow and explorer off of the territory, would give them something unique while still keeping a lot of the virtues of a Unibody SUV/CUV thing (could even call it a real SUV with AWD added).

        It would take time and loses at first, just build them first rate and let the reputation drive the success (aka the Lexus business model)

    • 0 avatar
      danio3834

      The MKR Concept was such an impressive looking car. They should have ran with that.

  • avatar
    danio3834

    Dang shame. Such awesome cars.

  • avatar
    racer-esq.

    The Aussie dollar is so high because their economy is booming. Why are the Aussie’s buying such sh*t bucket cars like the Corolla, which in the US is only purchased by impoverished retired people who eat cat food and whose dementia has them stuck in the 1990s when Toyotas had above average quality. I will admit that utes are pretty ridiculous, but I have no idea why Aussies, who are well off and have no snow, are driving compacts instead of the BMW 5-series level, in size and engineering, sedans and wagons that Holden and Ford will sell them.

    • 0 avatar
      Ooshley

      Falcodores are the jack of all trades but master of none.

      90% of us are urbanised, and most of that is tightly clustered around a handful of cities where a lot work in the CBD, so a smaller nimble car just makes more sense for the commute.
      If you’ve got kids or the need/want to hall stuff about then a CUV/SUV does that better so you get that as your 2nd vehicle.

      Ford/Holden recognise this, the former builds locally the Territory, and the latter the Cruze.

    • 0 avatar

      Although the tariff’s maybe low, and the aussie dollar is booming. There is still the luxury car tax which is 33% for every dollar over $57k.

      Although it still doesn’t explain why cars in Australia are just more expensive than in the US/UK. The cheapest 5 series is $88k AUD.

      Why the falcon/commodore isn’t selling, I think is a combination of “It was the car my father drove.”, “It is a car that bogan’s drive” and “It’s a large car, it’ll send me broke just trying to feed it”.

      • 0 avatar

        ^^^Yet somehow people do not grasp the cost of running an SUV. Fuel costs are the same or worse than a traditional large car and everything else wears faster, particularly tyres which are also more expensive because of the higher required load rating (which, if you ignore it, can void your insurance if you are at fault).

        Luxury car tax is another kettle of fish but yeah, kind of ridiculous considering how many fuel saving technologies are in higher end products and we are all supposed to be saving the whales. :-P

      • 0 avatar
        Ooshley

        The LCT threshold is ~$16K higher for cars that get 7L/100km or better.
        It’s still a stupid punitive tax though.

    • 0 avatar
      outback_ute

      Only certain sections of the economy are booming, the rest is pretty flat and there are lots of industries really suffering. Costs of basics such as power, water and food have increased significantly in recent years, also house prices. Not surprising lots of people have decided not to purchase more car than they need, even before you consider that C-segment cars are roughly the equivalent of a mid-sized car from 20 years ago and with smaller families that is all you need.

  • avatar
    NormSV650

    “Why are the Aussie’s buying such sh*t bucket cars like the Corolla, which in the US is only purchase by impoverished retired people who eat cat food and whose dementia has them stuck in the 1990s when Toyotas had above average quality.” Bertel should personally hand you the quote of the week award.

  • avatar

    It’s amazing how Holden and Ford are always highlighted as receiving government assistance, but Toyota get a free pass (feel free to remedy that *hint hint*).

    The reason people are buying those little shit box cars (and more often, semi capable “SUVs” which are really CUVs in North American speak): fashion. There is merit in the fuel economy savings in many small cars considering the price of our fuel, however much of the savings are erased in servicing costs in the case of European and diesel models.

    The Falcon and Commodore specifically are perceived as fuel hungry despite Holden’s most efficient model running at a certified 8.9L/100km [26.4USMPG] and the LPGi Falcon having lower fuel costs than a Corolla.

    Marketing from both companies doesn’t even mention this issue with any great fervour, I guess, in fear of scaring off their traditional customers.

    Falcon was even the first application of the 2.0 Ecoboost 4 cyl in a RWD application. No hoopla, hardly any marketing.

    In the scheme of things, government “co-investment” in Australia is almost the lowest on earth but the first thing highlighted when the industry struggles against the two-speed economy created by the resources sector.

    • 0 avatar

      Note: the rest of the country doesn’t mind complaining about how hard it is to compete with exports in the 2 speed economy, but “economic empathy” is not exactly a common trait.

    • 0 avatar
      Lee

      And therein lies the problem that Ford Australia has ALWAYS had. For decades now their marketing has been utter crap.

    • 0 avatar
      tresmonos

      beltedradial:
      The Falcon was the 2nd 2.0L Ford oval badged vehicle ever, as it’s launch was 6 months prior to the Edge but shortly after the Mondeo (not sure on that timing). First RWD application (like you said), just wanted to give more credit to Ford of Australia.

      That would be a sick ride with a six speed. Ugh. One Ford is punching me in the kidneys right now.

  • avatar
    APaGttH

    Holden and Ford of Australia build some pretty damn amazing cars out of their respective parts bin.

    Exchange rates would make the Pontiac G8 impossible today.

    Bang for the buck, the Holden VE rear-drive platform was one of the best in the world when it was born.

    I love that wagon – and if GM had made a Pontiac G8 Sportwagon I would have been on it like white on rice (sadly me and maybe 20 other people)

    • 0 avatar

      Mine is almost the same (add Sizzle metallic paint and dark tint). They’re a great vehicle out of the box, even in my mid range 3.6 V6. Consider the fruit they currently come with, I just can’t understand how people are favouring thirstier, smaller CUVs. LAME!

    • 0 avatar
      racer-esq.

      A G8 GTP wagon may have sold 20, but the V6 verson would have moved. I saw a lot more Magnums than Chargers on the street until Dodge killed the Magnum for the 2nd generation.

      • 0 avatar
        APaGttH

        No such thing in the G8 world

        G8 base – 3.6L V6 in the craptatic 256 HP configuration

        G8 GT – 6.0L L76 V8 with AFM – 364, 361 or 355 HP depending on when produced

        G8 GXP – 6.2L LS2 V8 detuned to 415 HP (Corvette was 430 HP)

        The price difference between the G8 base and the GT was about $2400

        $2400 got you…

        * 2 extra cylinders and at least 99 more HP and at least 110 pound feet of torque
        * 1 extra cog in the transmission
        * The upgraded stereo with color display and 11 speaker sound system
        * Dual zone climate control
        * Polished stainless exterior trim
        * Quad tip dual exhaust, and yes, the dual exhaust is actually functional
        * Slightly larger front brakes

        Do the math — for $2400 it was a bargain. The MPG penalty? 2 MPG city and 1 MPG highway. 15/24 for the V8 versus 17/25 for the V6.

        If the G8 had survived to 2010, it would have gotten the 306 HP version of the 3.6L V6, and probably safe to assume that it would now have the 322 HP version found in the Camaro, if still alive.

        The global hand writing is on the wall – and affordable midsize/fullsize V8 asphalt eating sedans, even with the improvements in economy, ride, handling, and content, are a dying breed.

        It appears Chrysler and Dodge will soon be the standard bearer for the world (again stress affordable, an AMG Benz is not affordable)

      • 0 avatar
        ajla

        I was pretty okay with the G8 V6. The non-DI 3.6 doesn’t feel any weaker than the DI version in usual driving. I also liked the behavior on the 5-speed.

        That said, you are right, the value proposition and fuel savings just weren’t there. In general, the GT was a bargain. Starting the V6 around 23k would have helped the 3.6.

      • 0 avatar
        gottacook

        Yes, but the Magnum was sold for a full model year before its platform mate, the first-generation Charger, was introduced – so it’s no surprise you would have seen more Magnums.

      • 0 avatar
        APaGttH

        @ajla my introduction to the G8 was a 2008 V6 version as an Avis rental car with 40 miles on the odometer. I was told I was the first renter. I pounded almost 600 miles into the car in less than a week. I was in a word, stunned. I could not get over how much better this was over the Pontiac Grand Prix for Pontiac Grand Prix cheddar (when equipped similar).

        I ended up buying an ’09 the next year…if they had the wagon, I would have bought that. No need for it, just the whole ideal of a wagon that goes 0 to 60 in 5 seconds, burns the quarter mile in 13-1/2, stops from 60 in about 110 feet and can push .90 on a skidpad.

        Dude, you just got passed – by a WAGON.

      • 0 avatar
        doctor olds

        I rented a Commodore with the DI V6 6 speed automatic in fall 2010. Drove from Sydney to Melbourne and back. It was a GREAT car!Shame we don’t have G8s anymore.

    • 0 avatar
      d524zoom-zoom

      @ APaGttH

      Agreed make me #21…that is the first pic i have seen of a “Comwagon”
      I am in LOVE…and i have absolutely ZERO need for a wagon, but would buy one now if it were available in the states!!

  • avatar

    I think we’ll also see quite a few products fall out of the Alpha platform tree in the years to come. In fact I find it rather likely that the Commodore replacement will be a US (or possibly Canadian) import for Australia. That’s not necessarily a bad thing as it will make them more affordable (lower production cost + less demand).

    Holden will move to a more market appropriate product even though it will probably be less beltedradial appropriate.

    No idea what Ford Aus will do.

  • avatar
    chicagoland

    “Why the falcon/commodore isn’t selling, I think is a combination of “It was the car my father drove.”, “It is a car that bogan’s drive” and “It’s a large car, it’ll send me broke just trying to feed it”.”

    Sounds like what happened to the Crown Victoria and Town Car. Purists here in US for years assumed that all of AUS “loved” RWD cars and “if Detroit promoted them, they’d be saved”. Looks like reality is showing what’s really happening, again.

    • 0 avatar
      danio3834

      The difference between the Panthers and the FG Falcon is that the Falcon is very much up to date and competitive with world leaders in that segment, with the last generation redesign in 2008. It is technically more sohpisticated than the Mustang.

      The Panther hadn’t really had any major refresh in the last 8 model years and no body style changes in 12. They were great cars for their niche, but the retail market left them behind.

      If the FG Falcon was promoted in the US it could easily go head to head with the Charger sales wise. Ford had studied the idea, but ultimately felt the US market is best served by only the Taurus, selling both would create too much cannabalism for their liking.

      But hey, if Chevy can bring their new Impala to market, as well as the SS sedan, there’s probably a business case. Really, the only hurtle would be developping a LHD version for export, which was happening, but didn’t.

      • 0 avatar
        rnc

        Thats it, the Taurus should be the Falcon, the fusion is what the taurus was, making the Taurus a Falcon (to keep the name going) would give them the police interceptor market back and a family performace sedan for those who would lust for mustang, but have two kids, base the next explorer off the terratory (falcon L platform) and you have a unibody SUV (that would give the benefits of the unibody while offering something unique against the others CUV’s with AWD.


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