Sun sets on Ford's Australian manufacturing business

October 9, 2016 4:31 PM EDT

Nick Doria, a worker at the Ford Motor company's Broadmeadows Assembly Plant, holds a flag as he leaves the factory with a fellow worker before it closes in the Melbourne suburb of Campbellfield, Australia, October 7, 2016. AAP/Julian Smith/via REUTER


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By Sonali Paul and Jonathan Barrett

MELBOURNE/SYDNEY (Reuters) - The last Australian-made six-cylinder Ford (NYSE: F) Falcon rolled off an assembly line on Friday, marking the end of Ford's 91-year history of car-making in a country that simultaneously fell out of love with big cars and manufacturing.

The end of operations - to be mirrored by GM Holden (NYSE: GM) and Toyota <7203.T> Australia next year - coincides with a move by the famed car company to close in Japan and Indonesia, where it sees "no reasonable path to profitability".

The impending death of car manufacturing in Australia has sparked heated debate over the future of the economy and the role of government in propping up ailing sectors, after the governing center-right coalition cut subsidies to the sector.

Dave Smith, national vehicle division secretary of the Australian Manufacturing Workers Union, said the Ford workers "handled themselves with magnificent dignity" on their last day.

"It's a shame for Australia because I think we lose so much when we no longer have vehicle manufacturing. But, you know, that's part of history now," Smith told journalists at the Ford factory in the Melbourne suburb of Broadmeadows.

About 600 Ford workers are losing their jobs on Friday, all in the state of Victoria, where Ford's Australian operations are headquartered. Separately, 160 Ford manufacturing employees are being redeployed to design and engineering roles with the company.

Ford Australia chief executive Graeme Whickman said while it was a difficult day, it was an honor to see the last Falcon XR6 produced. He said the last manufactured cars would be put on show rather than sold privately.

END OF AN ERA

The decline of Australia's manufacturing industry - employment in the sector out of total employment dropped from 13.4 percent in 2005 to 7.8 percent last year - has not been helped by changing tastes as motorists turn against the locally made, big passenger cars Ford and Holden are traditionally known for, for overseas-made small cars and sports utilities.

Car manufacturers started making decisions to close down Australian operations in 2013 when the Australian dollar was above parity against the U.S. dollar, making local manufacturing uncompetitive.

Retired Ford dealer Martin van Koldenhoven, from rural Western Australia, told Reuters the car-maker dominated sales in the 1980s with its sedans and "utes", or utility vehicles, but then fell behind when buying trends changed.

"Be it light commercial or four-wheel-drives or small cars, they seemed to be a step behind," van Koldenhoven said.

"The market shifted and Ford didn't shift fast enough. It's a sad day - perhaps I'll fly my Ford flag at half-mast."

Even though Australian car enthusiasts grew up watching Ford battle Holden at the Bathurst 1000 touring car race in New South Wales, and both car-makers have large supporter networks, that has not translated into sales.

Both brands trail Toyota, Mazda and Hyundai, according to September sales data for the Federal Chamber of Automotive Industries.

Paddy Boylan was among a handful of Ford fans who drove more than 400 km (250 miles) to Melbourne to pay respects.

"We came to pay homage as humble pilgrims," said Boylan, who drove up in a 1962 XK Ford that he bought 18 months ago. "I've just always loved Falcons, and it's the end of an era."

($1 = 1.3191 Australian dollars)

(Reporting by Jonathan Barrett in SYDNEY and Sonali Paul in MELBOURNE; Editing by Robert Birsel)



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