Call to keep tariffs as Ford posts $87m loss

Peter Farago
STATE Government wants automotive industry tariffs maintained at 10 per cent until 2015 on the back of a massive financial loss for Ford Australia.
Ford posted an $87.2 million loss for the 2007 fiscal year after sales plunged almost 12 per cent.
Ford Australia president Bill Osborne described 2007 as a “challenging year”.
As new car sales plummeted, the company announced closure of its Geelong engine plant, costing 600 jobs, to make way for a new US-built V6 in Falcon and Territory. This company later revealed another 76 jobs cuts.
Ford has ploughed money into new vehicle programs, including an all-new FG Falcon and a new Mondeo and unveiled plans to start local production of Focus small cars from 2011.
The company also made significant investments in world-class research and development facilities in Geelong and at its Lara proving ground.
“We continued to make significant investments in our facilities that will help secure the long-term future of Ford in Australia,” Mr Osborne said.
“These will further establish our business as a centre of automotive design and engineering excellence in the development of class-leading vehicles for Australia and overseas markets.”
Falcon ran second to an all-new Commodore in the large car segment in 2007, while Territory continued to lead the medium SUV segment with a 23 per cent share.
Mr Osborne, who was appointed president of Ford Australia earlier this year, said the company was putting its money on the new Falcon for an improved financial result.
“The arrival of the all-new FG Falcon will further boost our showroom appeal,” he said.
Mr Osborne believed that last year’s decisions to close the engine plant and build Focuses in Geelong and Broadmeadows would improve Ford’s chances of capitalising on changing buyer patterns.
Premier John Brumby said Federal Government must retain existing automotive tariffs at 10 per cent until at least 2015 to ensure the future of Victoria’s $15 billion auto industry.
Mr Brumby also called for retention of an Automotive Competitiveness and Investment Scheme at existing levels with a focus on research and development.
“Maintaining existing tariffs at 10 per cent is vital to securing local jobs and ensuring future investment in manufacturing in Australia,” Mr Brumby said.
“We have taken a common sense position based on changes in the economic climate and a desire to put our local industry at a competitive advantage in global markets.”
Mr Brumby said the domestic market was too small to support a competitive auto industry on its own, so future growth depended on accessing global supply chains.
However, opposition manufacturing, export and trade spokesperson Peter Ryan said the tariffs call was “predictable” given former premier Steve Bracks was heading the automotive inquiry.
“We should be investing in innovation to keep the industry competitive in its own right instead of artificially extending its lifespan through the retention of higher tariffs,” Mr Ryan said.