Ford Motor Company (F) Calls It Quits in Australia

Holden chief Mike Deveraux has committed to domestic production through 2022, but has lately been hinting that some sort of government assistance would be necessary to “help keep us competitive”. The subject of government aid for automakers is being hotly debated in Australia, all the more so with Ford’s announcement – even as Toyota Motor Corporation (ADR) (NYSE:TM) says that it will stay with no government aid necessary.

But Ford Motor Company (NYSE:F)’s departure could end up having a larger impact if local Australian suppliers are unable to keep their doors open without Ford’s business. Leaders of the Australian Manufacturing Workers’ Union, which represents auto workers, said this week that Ford’s decision could end up costing 6,000 jobs. Supplier failures could make it harder for Holden and Toyota to keep their local factories viable.

The upshot: Change was inevitable for Ford
It was inevitable that Ford’s Australian operation would have to be brought fully into the company’s globalized plan. But it wasn’t inevitable that Ford would stop making cars in Australia altogether.

Ford might have found ways to make it work, just as General Motors Company (NYSE:GM) has: Holden’s rear-wheel-drive sedans are based on GM’s global Zeta platform, which underpins the Chevy Camaro and the big Buick Park Avenue that GM sells in China, among other vehicles.

But unless the Australian government is somehow able to change Ford’s mind, apparently the Blue Oval’s long run of building cars Down Under is coming to a close.

The article Ford Calls It Quits in Australia originally appeared on Fool.com and is written by John Rosevear.

Motley Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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