Analysis and Commentary

Ford slashes engineers as automotive sector continues its decline

Analysis and Commentary

By Peter Roberts

When Ford Australia stopped making cars in Australia in 2016 it retained a significant workforce including perhaps 1,000 engineers involved in engineering and designing new vehicles.

Their skills with technologies such as finite element analysis for analysing designs and their design flair was said at the time to ensure the continued life of the Ford engineering operation into the future.

Well, like many of the promises Ford made to Australia during the decades it made cars here – supported it should be said in later days by hefty public subsidies – this has turned out not to be the case.

The company is in consultation with the unions to offer a ‘separation programme’ for about 400 or around a fifth of their workforce in Australia.

Ford Australia said in a statement: “The majority of these will be in product development and design, with a small number in other functions.

“…Australia will continue to be the centre of development for the Ranger and Everest globally.”

According to media reports Ford has cut about 40 per cent of its design and engineering workforce in Australia in the past 12 months.

So having disposed of its blue collar workforce seven years it is now getting rid bit by bit of a highly skilled engineering workforce whose jobs it finds can be done more cheaply somewhere else.

So the harm done to the automotive sector by the exit of car manufacturing rolls on – the country is being subjected to its own ‘separation programme’ and the pain is not over yet.

While job losses are there for all to see, some of the more subtle blows affecting the automotive market are less easy to see.

Losing the car industry has seen Australia become an afterthought in many company strategies, with Australian customers not getting the full range of their vehicles, getting them later than everyone else, or getting downgraded versions with poorer environmental standards.

Many buyers are finding they have to wait many months to take delivery of cars they have ordered – there simply are not stocks of cars sitting round waiting to be bought.

Most insidious is the inflation in car prices which used to be moderated by the presence of local competitors.

Cars in Australia used to be priced above or below that of a Holden Commodore – it set the benchmark price and was not affected by things like changing exchange rates as much as imports.

Today we get charged what the market will bear.

Small cars sell for medium sized car prices, medium sized sell for large prices and more expensive vehicles approaching $100,000 are increasingly common.

These are the sort of effects not taken into account by the dry economists of the past, nor by the coalition government which so casually waved off the car manufacturers – in the end openly willing them to close up shop.

We need to get a whole lot smarter if we are to avoid becoming what Paul Keating predicted for our future – becoming a banana republic.

Picture: The last Australian made Ford Falcon rolls off the assembly line – Australia has been suffering ever since

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