Ford Announces $250 Million Investment in Victoria Amid Restructuring

Ford Australia's president, Mr. John Ogden, announced yesterday that the company will invest $250 million in Victoria this year, part of a larger shake-up that will see the closure of the Homebush plant in Sydney and the end of production for the Capri sports car. This significant investment demonstrates Ford's commitment to manufacturing in Australia, but also signals a shift in focus towards the company's core operations.

Ford will cease production of the Laser and close its plant in Homebush, resulting in the loss of around 400 jobs. However, the 200 workers currently employed on the Capri line will be redeployed to other areas of the business. Component makers have expressed concerns that up to 400 jobs in related industries could be lost as a result of Ford's decision.

Mr. Ogden emphasized that the company is committed to building its financial strength in Australia and will focus solely on its Falcon range, which is the mainstay of its operations. He noted that the company has turned around its operating profit before tax dramatically, from a loss of $37.3 million in 1992 to a profit of $75.9 million in 1993.

However, Mr. Ogden also noted that Ford's future presence as a manufacturer in Australia is uncertain beyond three or four years. The Federal Government's tariff-reduction policy has been identified as a potential issue, with Mr. Ogden warning that achieving a 15% tariff rate by 2000 may be challenging if micro-economic reforms do not proceed at the same pace.

Key Takeaways:

• Ford Australia will invest $250 million in Victoria this year as part of a larger restructuring effort.
• The Homebush plant in Sydney will be closed, resulting in the loss of around 400 jobs.
• The Capri sports car production will be ceased, and the 200 workers previously employed on this line will be redeployed to other areas of the business.
• Ford will focus solely on its Falcon range, which is the mainstay of its operations.
• The company has turned around its operating profit before tax dramatically, from a loss of $37.3 million in 1992 to a profit of $75.9 million in 1993.
• Mr. Ogden warned that achieving a 15% tariff rate by 2000 may be challenging if micro-economic reforms do not proceed at the same pace.
• The restructuring was not solely due to the Federal Government's car plan, according to Mr. John Button, the former Industry Minister.
• The present Industry Minister, Senator Cook, attributed the closure to Ford's failure to put together an "effective export operation."
• The Automotive, Metals and Engineering Union (Vehicle Division) expressed disappointment at the announcement and plans to serve a log of claims on Ford.

Statistics:

• Ford will invest $250 million in Victoria this year.
• 400 jobs will be lost at the Homebush plant.
• 200 workers on the Capri line will be redeployed to other areas of the business.
• Ford made a $45 million loss for the year to December, after writing off $89 million in restructuring costs related to the closure of the Homebush plant.
• The company's operating profit before tax improved from a loss of $37.3 million in 1992 to a profit of $75.9 million in 1993.

Sources:

• "Ford to close Homebush plant, switch to Falcon production" (unknown publication date)
• "Ford's John Ogden delivers dismal news for Sydney workers" (unknown publication date)
• Ford Australia's website (no date)
• Australian Financial Review (no date)
• Sydney Morning Herald (no date)