Ford Australia's closure of its Broadmeadows and Geelong production facilities from October 2016 may be the death knell for GM Holden in Adelaide.
About 1200 jobs will go in Victoria but the company will remain an engineering outpost for its global products. Ford says it will continue to employ more than 1,500 people in Australia in research and development and dealerships after 2016.
Ford has lost $141 million over the last financial year and more than $600 million over the past five years. The locally produced Ford Falcon has been in sales free fall for the last decade. In 2002, the Falcon sedan and wagon accounted for 54,629 sales locally, while last year that number had dropped to just 14,026.
Ford Australia also produces the Falcon Ute, which has also seen a drop in sales over the past 10 years. In 2012 just 5733 units were sold, compared to 17,883 in 2002.
Boosted by a stronger dollar helping drive down import costs, Australian buyers have shifted increasingly to carmakers like Mazda Motor Corp and Hyundai Motor Company which have seen market share grow on sales of fuel-efficient small cars and the popular SUVs.
In January 2012, the Gillard government announced a $34 million grant to Ford. In return Ford publicly indicated that it would continue making cars in Australia on the Falcon platform, at least until late 2016.
Australian-made car sales have recently hit record lows, including the Holden Commodore, which held the top spot on the sales charts for 15 years straight.
The Ford announcement comes at the same time as Holden is launching its new-generation VF Commodore.
Holden was $152.8 million in the red in the 2012 calendar year despite $73.5 million in government funding. Its biggest result in the red was $210.6 million in 2009.
"We are losing [money] on our locally produced cars and that's obviously a position we need to reverse," said Holden chief financial officer George Kapitelli told News Ltd. "What the headline numbers today (Feb) don't show is the difference between General Motors profitability versus Holden profitability. Holden's imported portfolio is profitable. The losses we have talked about today are a direct result of Holden building cars in Australia."
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