The car maker Ford has announced the closure of its Australian manufacturing plants in Victoria with the loss of more than 1000 jobs.
Ford Australia says the company will stop manufacturing in October 2016 closing its assembly line in Melbourne and its engine plant in the regional City of Geelong.
The company says it's simply not viable to keep manufacturing cars in Australia.
Greg Dyett reports.
Announcing losses of $141 million over the past financial year and close to $600 million in the past five years, the President of Ford Australia Bob Graziano then dropped the bombshell:
Ford would stop making cars in Australia after almost 90 years with the loss of 1200 jobs.
"Our locally made products continue to be unprofitable while our imported products are profitable. In the search to improve scale and competitiveness, we explored what export opportunities might be available to us but we were still faced with the fact that our cost structure in Australia remained uncompetitive. Our costs are double that of Europe and nearly four times (the cost of) Ford in Asia."
Following the announcement, Prime Minister Julia Gillard pledged $39 milliion in joint Federal and Victorian government aid to a support fund to help workers at the company's plants in the Melbourne suburb of Broadmeadows, and in Geelong.
She urged Ford Australia to contribute.
"I call on Ford to make a substantial contribution to this fund as well. The fund will work with local communities so that we can source new opportunities for those communities, new work for people to have in the place where they're proud to work and so happy to live."
Ms Gillard says the two governments will also provide $12 million to help employees of other companies providing parts to Ford, who may also now lose their jobs.
Federal Opposition leader Tony Abbott says the Ford announcement shows governments need to ensure they get the settings right to encourage manufacturing in Australia.
"It is incumbent on everyone associated with government in this country to do everything we reasonable can to make it easier not harder for manufacturing to go ahead in this country. That means getting taxes down, it means getting regulations down, it means getting productivity up, it means trying to ensure that there are no sovereign risk issues associated with our country so that investment comes in."
Both Federal and state governments have been subsidising Australia's car industry for decades, mainly because tens-of-thousands of Australians are either employed directly or indirectly in the industry.
And last year the Federal Government gave 34 million dollars to Ford to support its manufacturing until at least the end of 2016.
The Assistant Secretary of the Australian Manufacturing Workers Union Leigh Diehm says the Ford workers are devastated.
Mr Diehm hopes Australia can continue to support a car industry.
"We're still hopeful that this is a strong industry in this country, we're still hopeful that this industry continues in this country into the future because it's such a vital industry to the economy and the country. (Reporters) Do you think Australians though should be angry because of all the state and federal money that's been poured into Ford? (Diehm) Look, I think at this time it's too early to make any comment on that whether Australians should be angry or not. I'm not going to make any comment on that at all. We need to make sure that this industry survives in this country because it is so vital to the country so I'm not going to make any comment on that."
Last month, the former head of Ford Australia who eventually headed Ford's global operations in the US, Jac Nasser, claimed the end of the entire car manufacturing industry in Australia was inevitable.
Also last month, Holden announced its was slashing 500 jobs in South Australia and Victoria because of falling demand and the high Austtralian dollar which has been at parity or slighter higher than the US dollar for several years.
Ford says after the manufacturing plant closures,1500 people will remain employed in research and development.
Its car dealerships will sell imported vehicles.
Ford Australia is the third largest car manufucturer in Australia and it started first started producing vehicles in Geelong in the 1920s.
In a little more than than three years from now in October 2016 the last of its Australian-produced cars will roll off the assembly line.
