# Ford pulling out of Australia



## Swifty (May 23, 2013)

Announced yesterday that Ford will cease producing cars in Australia in 2016.
Rising cost have made it uneconomic to make cars here, beaten by lower wages in other countries. My home state of Victoria is the base for the Ford engine plant and the assembly plant.

Another nail in the coffin for manufacturing here, only left with Toyota and GMH making cars now. Although 1200 people will lose their jobs directly, it will have a flow on effect with component suppliers. Victoria and South Australia were once the main players in automotive production, but rising costs are putting an end to that.

Although I retired from business 10 years ago, the downturn had already started at that time. Nissan closed while I was still in business (toolmaking) but we managed to survive losing that work and picked up a lot of work from Toyota. 

We're turning from a manufacturing country into an importing one.

Paul.


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## jwcnc1911 (May 23, 2013)

I hate to hear that, working in the automotive industry myself (in USA).  I do my best to buy American when at all possible.  Many people get lured in by lower price.  It has been my experience that you ALWAYS get what you pay for.  Whether it be there in Australia or here in USA, we the people must support ourselves by purchasing items made in our own home.  Support America, buy American.  Support Australia, buy Australian.  Now don't misunderstand me, I have no ill will at all towards Chinese, Taiwanese, Bangladeshian, Indian or where ever else stuff comes from.  I just think people should support themselves, their families, their neighbors and their countrymen first by buying from within.  Want the money to stay here?  Spend it here.

When the company I work for started a business in China, they had to build a power plant because the area had no electricity.  As a skilled tradesman I don't want to compete with that, some one who lives in a thatch or mud hut.  If we do, we'll soon live in thatch or mud huts as well.

I hope another manufacturer steps in to fill the void.  Maybe Chevy will step up production at the loss of Ford sales.

Any who, I don't mean to start a fire but people have to support themselves.  Don't get me wrong, I'm not against trade.  Just shop local first, whether your in USA, Australia, UK, Germany or any where there are skilled trades and a decent standard of living.


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## rcfreak177 (May 23, 2013)

Goodbye Ford Falcon and FPV,

Hopefully we bring in the USA made Mustang or similar to compete with the Holden Commodore and HSV in the V8 Supercar round.

*By the way, Anybody in the US get to the V8 Supercars last week in Austin Texas ?
*
http://www.v8supercars.com.au/events/2013-v8-supercars-championship/austin-400


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## Davo J (May 23, 2013)

I don't think Holden will be far behind them, there is already talk of off shore manufacturing.

People will buy there KIA's, Sangyongs, etc, then complain latter there is no quality in cars, but they will then have no choice because the quality ones will be long gone.


Dave


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## lennardhme (May 23, 2013)

Bad management. The trend in Oz. for some time has been towards small economical transport, particularly deisels, & neither of the big 2 cottoned on early enough.
Aussies arent buying Chinese vehicals. Plenty of EU though. VW, Peugeot. Mercedes etc. Damn good cars.


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## jwcnc1911 (May 23, 2013)

They won't be bringing the Mustang in... it's a Ford.


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## aarggh (May 24, 2013)

I think what Ford decided was inevitable given the global market and the very, very, high local costs (and profit margins), and Holden won't be too far behind I suspect, but it's such a shame, and will hit Geelong especially badly. I really feel for the guys who have spent many years working there, and may not have good prospects down the track. I just wonder though, how well the fat cats at Ford have done themselves over the last several years, given it's been a downward trend for at least a decade? If it's like most companies these days, it's rape and pillage to pay obscene bonuses just for turning up to work occasionally, never performance based as that would be too unfair in a downturn. If I had to pick only a single thing wrong with business in Australia, that would be it!

cheers, Ian


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## slaurenson (May 24, 2013)

I brought a 2005 Mustang GT across to NZ from the US, brilliant car and extremely well made, very solid..


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## Hopper (May 24, 2013)

The Chrysler/Mitsubishi factory where I did my apprenticeship closed down about five or six years ago. Like you say, it was not just the thousand or more jobs at the factory that went, but all the small parts manufacturers and suppliers shut down too. It's too bad. My two brothers did their apprenticeships there too, and the old man worked there 28 years. Just the last remnants of the building left today. Lot of skills were lost when it closed, skills this country will probably never get back as we become a 'service economy' all working at flipping burgers for each other.


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## jack620 (May 24, 2013)

jwcnc1911 said:


> Many people get lured in by lower price.



True, but just as many need their ego boosted by having a European car sitting in their driveway. We call it the "Cultural Cringe" here in Oz. The Aussie made Fords and Holdens are very good cars. Sure they aren't as good as a Merc or BMW, but they cost half or less and they keep Australians in jobs. Next time I hear a Euro-car owner complaining about the number of people on welfare, I'll be sure to point out to him that his choice of vehicle helped put a few people out of work.


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## rcfreak177 (May 24, 2013)

Oh well I guess I will be hanging on to this then


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## rhitee93 (May 24, 2013)

I tend to agree wit the "Buy <Insert your country here>" sentiment.  However, it isn't as easy to do that as people may think.  Here is why:

I live in the USA, and I am not sure how much this argument applies in other countries.  In this country, most of the cost of a car is made up of components that come from only a few hundred miles away.  In other words, if I spend $20k on a vehicle, most of that $20k was used to buy parts and materials from suppliers in the same region.

Now, I have two Chrysler products in the driveway.  Both cars were assembled in Canada.  I would have done more economic good in my region if I had bought a Toyota made in the plant 100 miles south of me. (Indiana)

If you are after the economic impact, it's not about the brand, it is about the people who got paid to make the product you bought.


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## jwcnc1911 (May 24, 2013)

jack620 said:


> True, but just as many need their ego boosted by having a European car sitting in their driveway. We call it the "Cultural Cringe" here in Oz. The Aussie made Fords and Holdens are very good cars. Sure they aren't as good as a Merc or BMW, but they cost half or less and they keep Australians in jobs. Next time I hear a Euro-car owner complaining about the number of people on welfare, I'll be sure to point out to him that his choice of vehicle helped put a few people out of work.



Exactly my point jack, buy local.  If it cost less then all the better.  I wasn't talking about higher priced "luxury" items.  I'm talking about lead painted Chinese $0.99 "bargains".  I personally own 2 as much American made as possible vehicles. My Chevy sonic is made in Lake Orion michigan versus the comparable ford focus made in Mexico.  To my understanding the Tahoe is made in Arlington, Texas.


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## rcfreak177 (May 24, 2013)

jwcnc1911 said:


> They won't be bringing the Mustang in... it's a Ford.



Ford is only stopping manufacturing in Australia, I would assume that Ford vehicles will still be marketed here. The demand for the brand name will always be there, it is part of our culture as is your's.

Very bad for our workers losing jobs and businesses losing out as well
.
If Ford brings in cars from elsewhere that is a bonus from wherever that may be.

Prime example is Chrysler, years ago they stopped manufacturing here, The demand remained so now Australia imports from the USA, the 300C is very popular here, great quality and reasonable price, Jeep is also another one, they are a dime a dozen on our roads, Not too sure but I think Jeep is Chrysler anyway.


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## rondunn (May 24, 2013)

It is a sad day for manufacturing and industry, and for all the families whose lives depend on on the jobs that will vanish. As many as 2,000 skilled workers will now be blowing their redundancies on lawnmowing franchises, etc., and the Jims mob must be expecting a tidal wave of applications.

What makes me angry is that Ford in Australia has received billions of dollars in government subsidies over recent years, and has blown the lot on stupid design decisions. When the Territory was one of the best designed cars in Australia, ideally suited to our conditions but crippled in the market by a bad engine choice, why did it take them YEARS to bring in the diesel that should have been there in the first place? When the downsizing market moved away from Falcon, why not build a Mondeo-platform model instead?

There are just so many dreadful taxis that the market can bear. The horrible experience of Falcon taxis - especially the station wagons - surely influenced the brand as well.

I was never a Ford man, but I'm very sad to see them leaving.


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## /// (May 24, 2013)

People have mentioned that Holden will go the same way.... I believe it is already happening.
The very popular Holden Cruze is a Chevrolet Cruze, and produced in South Korea.
The as-yet-unreleased Commodore VF is, as far as I understand, a re-badged Chevrolet SS.
I don't know if these will be imported with minor cosmetic tweaks done, or whether they'll be manufactured locally, but the design was definitely done offshore.


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## Swifty (May 24, 2013)

I believe that the government will continue to pour in money to subsidise Ford until they close. Then they will have to pour money into retraining and helping the employees that will lose their jobs. I feel sorry for the workers over 50, they seem to be overlooked by employers these days, it will be very hard for them to get jobs.

Paul.


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## jwcnc1911 (May 24, 2013)

rcfreak177 said:


> Ford is only stopping manufacturing in Australia, I would assume that Ford vehicles will still be marketed here. The demand for the brand name will always be there, it is part of our culture as is your's.
> 
> Very bad for our workers losing jobs and businesses losing out as well
> .
> ...




Duh.  I didn't consider importing them.  Just that they would not be made there.


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## rdhem2 (May 24, 2013)

When I had the pleasure of going to Sheperton (NW of Melbourne) in 1990 to do some work for my friend Burt I had the pleasure of riding in his brand new, fresh off the lot company car.  Other than the steering being on the wrong side, his new little *FALCON* did quite well.    ;D

I tried to explain that Falcons had come and gone back in the states but I don't know if he bought the concept or not!


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## BillyHill (May 25, 2013)

Davo J said:


> I don't think Holden will be far behind them, there is already talk of off shore manufacturing.
> 
> People will buy there KIA's, Sangyongs, etc, then complain latter there is no quality in cars, but they will then have no choice because the quality ones will be long gone.
> 
> ...



Offshoring has another affect many may not have realized... It has driven the quality of USA made products down as they try to compete. In more ways than one. 

Local manufacturers, in order to compete and be profitable, are cutting corners, trying to find cheaper ways of doing things. Most notably is in material quality, and in quantity of product. 

Everything from the (lack of) rigidity in Kennedy tool boxes these days (compared to the bullet proof one in my garage that I've had for over a quarter century), to socks that are so thin you can see through them and they wear out withing half a dozen washes, to tricky packaging that makes product look bigger while it's really smaller, to stinkin' water bottles that have such thin plastic half of them can't hold themselves up and caps that are so small they don't seal well (ask my why I'm glad my 7D is weather resistant!!) and on and on and on.


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## Spoonman (May 25, 2013)

/// said:


> People have mentioned that Holden will go the same way.... I believe it is already happening.
> The very popular Holden Cruze is a Chevrolet Cruze, and produced in South Korea.
> .




Actually the Holden Cruze is assembled in Australia at the Elisabeth plant.


R.I.P Ford Australia Manufacturing.


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## Iggsy (May 25, 2013)

Every single one of those who lost their jobs should be writing to their union rep and personally thank them for pricing them out of a job. Overunionised and overpaid. 

Labour costs (especially low skilled and unskilled labour) in Australia are unsustainably high. I've seen newly qualified trades and professionals thinkthey are entitled to annual package of well over $100K. 

Unfortunately, many other industries will go the same way as Ford - Rising cost bases (labour, power, redtape, greentape, raw materials etc.) make it increasingly difficult for a business to remain profitable here in Aus. 

Personally, I think the Aus economy is in for a wild ride.


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## jwcnc1911 (May 25, 2013)

Iggsy, I agree about the wild ride... but if Australia is anything like the US look at the wage gap of workers and executives.  Do you think one executive is worth millions?  Corporations are trying to get rid of skilled labor not realizing it's those skilled workers in their corp as well as other corps who buy the majority of their products.  We have CEOs here who are famous for killing plant jobs and sending trades to lesser economies and the media praises them.  The CEO we just ran off all but put us under.  Oh yeah, he took his $18,000,000 severance package and ran. He some how is still a major stockholder.  But I digress, it's all workers wages killing companies.  Not at all poor upper level management.


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## jwcnc1911 (May 25, 2013)

Read the part about "million hours"
http://mobile.bloomberg.com/news/20...5-man-and-8-75-million-ceo-shows-pay-gap.html

CEO = $11,000 Per F'ing hour!
http://www.huffingtonpost.com/ralph-nader/the-cruel-gap-between-ceo_b_2868557.html

Average $12million, about 380 times who's pay?
http://thinkprogress.org/economy/2012/04/19/467516/ceo-pay-gap-2011/?mobile=wt


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## /// (May 25, 2013)

Spoonman said:


> Actually the Holden Cruze is assembled in Australia at the Elisabeth plant.
> 
> 
> R.I.P Ford Australia Manufacturing.



You are correct, thought I had read that all Cruze were Korean, but apparently it is only the wagon that is built in Korea.


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## dj_pnevans (May 25, 2013)

Iggsy said:


> Every single one of those who lost their jobs should be writing to their union rep and personally thank them for pricing them out of a job. Overunionised and overpaid.
> 
> Labour costs (especially low skilled and unskilled labour) in Australia are unsustainably high. I've seen newly qualified trades and professionals thinkthey are entitled to annual package of well over $100K.
> 
> ...


 

You hit the nail right on the head. We have only are self toblame as we want more money, the money has to come from somewhere. So things goup to pay for the extra money that we wanted. 
David


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## jack620 (May 25, 2013)

Iggsy said:


> Every single one of those who lost their jobs should be writing to their union rep and personally thank them for pricing them out of a job. Overunionised and overpaid.



"Overpaid"? Do you know how much a Ford factory worker earns in Australia? 

"Overunionised"? Everyone on an award gets to vote on an EBA. If you think the pay rises offered in your EBA are too generous, vote NO. Don't blame the union, they just do the workers' bidding. 

"Pricing them out of a job"? The Ford workers live in a First World country but should settle for less than First World wages? Tell me- how much do you think an auto-manufacturing worker in Australia should earn?


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## jwcnc1911 (May 25, 2013)

Seriously, read the articles I linked.


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## Hopper (May 25, 2013)

Spoonman said:


> Actually the Holden Cruze is assembled in Australia at the Elisabeth plant.
> .



Assembled or manufactured? Huge difference. 
Common practice in the car industry in Australia and other countries has often been to assemble vehicles from "CKD Kits" ie completly knocked down, or packing crates of foreign made parts, panels, engines, trans etc simply put together and painted on site in Australia in order to avoid vehicle import taxes, higher shipping  charges etc.


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## Iggsy (May 25, 2013)

I read the articles and I agree, it&#8217;s obscene what some CEO's get paid. 




> "Overpaid"? Do you know how much a Ford factory workerearns in Australia?


 



> "Pricing them out of a job"? The Ford workers live in a First World country but should settle for less than First World wages? Tell me-how much do you think an auto-manufacturing worker in Australia shouldearn?


 
Well if we are talking wages, define first world. To me, the exact amount they get paid is not relevant - it depends on the persons skill sets, the demand for those skill sets, and the ability for the company to generate money using them. If costs outstrip revenues, there is a serious problem. 

I think wages should reflect what the company can afford to pay to recruit good workers, while still remaining profitable, preferably without billions of dollars of taxpayer assistance. 

And if you think you underpaid and under appreciated - work hard and get a promotion or find another job. That is how the free market works. 




> "Over unionised"? Everyone on an award gets to vote on an EBA. If you think the pay rises offered in your EBA are too generous, vote NO.Don't blame the union, they just do the workers' bidding.


 
Yes they are over unionised and consequently have poor productivity. Don't even get me started with EBA's. They usually go something like:

1. Company usually offers a pay rise, usually inline with inflation (i.e fair). Incentives may be made to employees in an effort to increase productivity. 

2. Unions get involved. Encourage employees to believe they are getting ripped. Those who want to accept are bullied/intimidated by union heavies. EBA voted down and strikes ensure. 

3. Company eventually caves to pressure. 

4. Costs increase, profitable decreases. People get laid off, or company moves offshore. 

Every industry has its exceptions, but it should be no surprise that the car industry is union heavy and unproductive.


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## jwcnc1911 (May 25, 2013)

Sounds like your envious of a job or your some sort of exec.  Add up all exec salaries, pay them an acceptable wage, divide the left over money to employees.  Boom good wages for all and profitable.  Our board of directors earned more last year than every factory worker in the states combined including hourly and salary.  That's some 20  something people earning more than 25,000 something people.  I completely agree with your war on wages your just attacking the wrong wages.


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## Hopper (May 25, 2013)

jwcnc1911 said:


> Read the part about "million hours"
> http://mobile.bloomberg.com/news/20...5-man-and-8-75-million-ceo-shows-pay-gap.html
> 
> CEO = $11,000 Per F'ing hour!
> ...




The whole debate on CEO salary vs worker salary is bogus.
So what if the CEO of Walmart makes $23 million a year? 
That is not where the low-paid workers' missing wages goes. Walmart last year made $15.7 BILLION profit. Which went to the shareholders. 

CEO Duke's $23 million is peanuts by comparison, not even two-tenths of one per cent of total profit that he is responsible for. 
Even if Duke decided to cut his annual salary to $3 million a year and share the remaining $20 million a year with his workers, that would give each of Walmart's 2 million employees a whopping $10 a YEAR extra. That is about 19 cents a week. Not even enough to buy a cup of coffee at Maccas.

But if the SHAREHOLDERS were prepared to give up a similar percentage of their $15.7 billion annual dividends,  that would give each employee an extra $7,000 a year.

But who are these profit hogging shareholders taking all the gold? Well, a majority are institutional investors, largely retirement funds and mutual funds that are working people's life savings.  So in order to give Wally World workers higher wages are you prepared to see your retirement fund bring a return of close to zero during the best of boom times and less the rest of the time?

The stockmarket and retirement fund investing there-in is the greatest con ever foisted on the workers of the world. The corporations get us to take most of the financial risk through stocks instead of risking their own money, then tell us they have to keep our salaries down in order to pay us back the return on our own money, if they make a profit. If they don't make a profit, then we lose our retirement investment return, and our jobs. 

So Ford has two choices: pay Australian workers Australian wages and give the shareholders no return, or a "negative return" on their retirement investments, or pay low Chinese wages and pay Australian and US shareholders a good return on their retirement nest-egg. 

So for the 1200 Geelong Ford workers it is a [email protected] deal. But for the thousands, probably millions of workers worldwide whose retirement fund has invested in Ford shares, it is the only way they will continue to have a financially secure old age.

Cutting CEO salaries will make jack difference to that.


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## jack620 (May 25, 2013)

Iggsy,
Sounds like you have a fairly large chip on your shoulder about unionised workforces. 

You opened with the claim that Ford workers are overpaid. I asked you if you actually know how much they are paid and your response is that the _"the exact amount they get paid is not relevant"_!

Your comments about EBAs do not accord with my experiance. In my industry the company ALWAYS opens with a pay rise well below CPI and still wants productivity offsets. On a few occasions they have offered a pay freeze due to "difficult economic conditions". Strangely they always seem to find a bit of money to reward themselves large bonuses. This happens even when the company makes a loss and/or the share price falls.


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## jack620 (May 25, 2013)

Hopper said:


> But if the SHAREHOLDERS were prepared to give up a similar percentage of their $15.7 billion annual dividends,  that would give each employee an extra $7,000 a year



The shareholders don't get to decide the dividend, management does. How about fair remuneration for the employees and a decent dividend?


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## Iggsy (May 25, 2013)

Nope, just a blue collar worker (boilermaker) turned white collar (engineer) who worked hard to get a good job and doesn't suffer from class envy. I hate wealth redistribution - taking someones hard earned just so someone else who doesn't have the responsibility/skills/education/work ethic sucks. No incentive to better yourself.  

People get paid on their ability to earn a company money - there is no other reason. Pay a CEO 10 Million to make the company 10 Billion? Purely in terms of numbers, it sounds like a good deal to me.  In Fords case, it sounds like their CEO hasn't done his job and should be shown the door along with the workers. 

In any case, I said I agreed with you - I think CEO salarys are excessive. But we were talking about Ford and they posted a second quarter loss of $424 Million. I don't think cutting the board of directors salaries alone is going to keep them in the black.


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## jwcnc1911 (May 25, 2013)

That's a very valuable point Hopper and I most definitely agree.  That is yet another nail in the proverbial economic coffin.  But I'm not on that soap box right now.

In fact I'm about to bow out here as I see this going no where.  I'd like to leave it where we can sociably amicably talk about model engines.


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## Hopper (May 25, 2013)

jack620 said:


> The shareholders don't get to decide the dividend, management does. How about fair remuneration for the employees and a decent dividend?



Management has to give shareholders the dividend they want, or the shareholders will pull their money out and invest it elsewhere. Again it comes down to shareholders wanting their pound of flesh.

Also, in Australia, corporate governance laws require that boards of directors and "management" run listed companies in the best interest of the shareholders. All decisions made must be able to stand the test of being in the shareholders' best interest. No mention of running companies in the interest of workers, the environment or the community. 
Sadly, the usual way of measuring shareholders' "best interest" is the dividend.


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## Iggsy (May 25, 2013)

> Iggsy,
> Sounds like you have a fairly large chip on your shoulder about unionised workforces.


 
In my experience, unionised workforces are the laziest bludgers I have ever come across and want control over the direction of the company they are not entitled to. Believe it not, your employer is paying you to do a job, not out the goodness of their hearts.I have seen too many strikes over non-issues to believe otherwise.



> I asked you if you actually know how much they are paid and your response is that the _"the exact amount they get paid is not relevant"_!


 
It isn't relevent. The company was paying them to much for too little productivity because it is not profitable - hence they have moved offshore. Whatever they were getting paid would have been a lot better than the dole where a lot will end up (for the short term anyway). If Ford doesn't pay well enough for them, they are always able to change jobs. 



> On a few occasions they have offered a pay freeze due to "difficult economic conditions".


Think about that next time you union encourages you to strike for a better pay deal. You might end up like the workers at Ford.

And I think I have had enough too. I do feel for the workers and their families - it is a tough economic climate at the moment and I suspect it will be difficult to find another job.


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## Hopper (May 26, 2013)

Here are the workers Ford dreams of having. 
[ame="http://www.youtube.com/watch?v=bMMMnNtBOHM"]www.youtube.com/watch?v=bMMMnNtBOHM[/ame]

Horrifying to watch for a former toolmaker who served his time on heavy press tooling in a car factory.
That is at least a 500-ton press and nobody should be within four feet of it when that top table comes down.
I think this is about the scariest thing I have ever seen outside a combat zone.


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## aarggh (May 26, 2013)

I have no issues with paying obscene wages for *good* talent in management, but it must also largely be made up of incentives and performance bonuses. Simply paying obscene amounts while suffering losses is plain wrong. And then paying out "Golden Handshakes" to get rid of these parasites is further insult to injury. In my job, we have incentives, if the company doesn't make profits of certain amounts, no bonus, plain and simple! High salaries must be as a result of high performance IMHO.

cheers, Ian


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## Spoonman (May 26, 2013)

Hopper said:


> Assembled or manufactured? Huge difference.
> Common practice in the car industry in Australia and other countries has often been to assemble vehicles from "CKD Kits" ie completly knocked down, or packing crates of foreign made parts, panels, engines, trans etc simply put together and painted on site in Australia in order to avoid vehicle import taxes, higher shipping  charges etc.




Working the automotive industry here in Thailand Iam very familiar with the differences between manufactured and assembled hence I said assembled which is atleast providing some jobs in Australia.


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## Swifty (May 26, 2013)

I made the original post to show our members what is happening to our automotive industry (and other sectors) in Australia. It appears that it has now ended up all about wages for management and workers. Whilst wages would amount to a fair slice of the price of a new vehicle, there are other costs involved. Raw materials, power, new machinery, plant upkeep, shipping etc. these costs are always going up as well.

Lets throw some loose figures together, Ford car production per day was fairly low, lets say 200 units, average car cost, let's say $25,000. This makes the daily output about $5,000,000. Now we take the wages for the 1200 workers who will be losing their jobs, don't know what the wage is but lets say $200 per day per worker, this makes $240,000. I am only trying to show how small a percentage the workers wages are in the final cost. Of course there are other wage costs involved, holiday pay, superannuation, sick leave etc, but as I said, these are only loose figures and I don't wont anyone jumping on me pulling it all to bits. If someone can prepare a better costing, please do so.

Paul.


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## aarggh (May 26, 2013)

Swifty said:


> Now we take the wages for the 1200 workers who will be losing their jobs, don't know what the wage is but lets say $200 per day per worker, this makes $240,000. I am only trying to show how small a percentage the workers wages are in the final cost. Of course there are other wage costs involved, holiday pay, superannuation, sick leave etc, but as I said, these are only loose figures and I don't wont anyone jumping on me pulling it all to bits. If someone can prepare a better costing, please do so.
> 
> Paul.


Hi Paul, I'm not nit-picking but I think the figure of $200 roughly per day might be too conservative and not really representative of the bigger picture in business. I know in the company I worked for previously, if I got paid $200/day wages, any work I did for other groups or customers was billed at $900/day to cover costs and actually produce a net profit. Sounds like a big gap but it's not really, as for any given number of workers, you need x square feet floor space, x tooling, tea room space and use, toiletries, OH&S, insurance, training, first aid, auditing and compliance, electrical safety testing, etc, etc, etc. You get the idea. So a company might be paying $200 per worker, but it may actually be costing them 3 or more times that amount once all the associated costs are taken into account.

cheers, Ian


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## Swifty (May 26, 2013)

Hi Ian,
That's what I was trying to point out, there are a lot more costs involved, the wages are only a minor part.

Paul.


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## rondunn (May 26, 2013)

No matter what we think of trade unions and big business, this is still a bad day for Australia.

When we're all serving fast food and mowing lawns, and every product we buy comes from overseas, and all our food production is owned by China, where will the money come from?

At the time it happened I was firmly in favour of free trade, getting rid of tariffs, and "levelling the playing field". Boy, was I wrong.


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## Swifty (May 26, 2013)

Rondunn, free trade isn't working, it breaks my heart to see things like oranges and apples bulldozed into the ground because imports are cheaper.

Paul.


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## aarggh (May 26, 2013)

Swifty said:


> Rondunn, free trade isn't working, it breaks my heart to see things like oranges and apples bulldozed into the ground because imports are cheaper.
> 
> Paul.



Places like Shepparton, along with farmers in general have really suffered with the squeeze from the big retailers. From what I understand, not so much because costs are high, but to maintain high x% net margins on groceries, the buy price has to be below $x. You really have to feel for the guys on the land doing it hard, and then getting a pittance for their efforts, or told to get lost otherwise. And when the produce buy price goes down in cost, that doesn't equate to a sell cost reduction, usually it simply means larger margins. One company I worked at years back used to buy fabric and ready made curtains ( there's huge profits in curtains!) in bulk from overseas, and we'd whack around 300-600% on top, compared to 200-300% for the stuff from our local workrooms.

A greedier person would have closed the workroom and just imported and sold direct, but luckily the boss was quite down to earth and had around 150 staff employed, and he still made good income.

cheers, Ian


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## Hopper (May 27, 2013)

aarggh said:


> A greedier person would have closed the workroom and just imported and sold direct, but luckily the boss was quite down to earth and had around 150 staff employed, and he still made good income.
> 
> cheers, Ian



This is part of the problem. Fewer and fewer businesses being owned and run by individuals or families. They are usually happy to make a good living, employ a bunch of local people and have fun making the widgets they are passionate about, be it curtains or car parts.
Seems like most of those businesses have been bought up by the larger corporations who are not happy to just make a good living but have to squeeze every last penny out of the operation regardless of everything else.


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## aarggh (May 27, 2013)

The sad fact, is that increasingly the sales and product forecast for most companies, is only what affects this or the coming quarters revenue and targets. Years ago companies would plan for the future measured in years, the future now is measured in days. And instead of a reasonable profits, they have to be ever increasing mega profits. Remember the days, not too long back, that banks with a small number of customers and holdings, could afford to have a large number of staff, and still find time for the branch manager to occasionally drop new checkbooks off in person? How did we go from modest returns and high staff ratios where everyone was happy, to mega-super-dupa-returns, but they can't afford to keep staff?

cheers, Ian


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## vederstein (May 27, 2013)

A couple of years ago in Indianapolis (USA), GM was shutting down a stamping facility.  Another company agreed to purchase the plant and keep all the employees if the union would accept a $15 per hour wage so the company could be competitive with other suppliers.

This wage was about half the wage the UAW (United Auto Workers Union) were getting.  The union bosses, recommended the rank and file members to take the deal - a job is better than no job.  The rank and file members had a shoutdown and offer company's offer was refused.  The plant closed and everyone lost their jobs.

My only point to relating this story is that labor is a market and is no different than any other marketplace. There is supply and demand.  In this case the supply was larger than the demand and to compensate, prices must become lower or you exit the market.  That's exactly what happened.

Eight years ago I lost my job to a combination of government interference (steel import excise taxes designed to protect US steel jobs - but not apparently my engineering job that used that those steel products) and reduced demand (contracting market for our product).  So I got another job.  Worked hard.  Stuck through it though I despised my boss.  Now I make about 30% more than when I lost my previous job.

I'm rambling now.

Sorry...

...ved.


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