US automaker Ford Motors’ Australian subsidiary is planning to shutdown two of its auto manufacturing plants in Australia amid high production costs and drop in sales.
As part of the plan, Ford Australia's engine plant in Geelong and a vehicle assembly plant in Broadmeadows, both in Victoria state, will be closed which could effect 1,200 jobs.
Ford Australia president and CEO Bob Graziano said the company has served Australian customers with the best vehicles that deliver enhanced technology at an affordable cost.
"Unfortunately, due to challenging market conditions we are unable to do that longer-term while continuing to manufacture locally," Graziano said.
The move follows the company's loss of AU$141m over the 2012 financial year, which brings the overall losses incurred over the past five years to more than AU$600m.
Ford Australia chief financial officer Mark Rearick said that the financial results mirror the restructure.
"We had a 30 per cent reduction in volume at the end of last year, and our financial results reflect that we had to re-value our asset base by a corresponding amount, accounting for the loss," Rearick said.
The decision would retire the Falcon brand when the plants shut their doors in 2016.
Following the closure of plants, Ford assured that it will continue to employ about 1,500 people in Australia in research and development and dealerships.
As part of the transformation, the carmaker is planning to launch more new products for Australian customers including a 30% rise in the number of new vehicles offered by 2016.
