More job losses at Ford in Australia's south

Updated August 22, 2008 09:04:49

Ford says its predicting softer car sales next year. [ABC]

Car manufacter Ford says up to 350 jobs are to go at two plants in the southeastern Australian state of Victoria.

Ford says it plans to start cutting production at its Broadmeadows and Geelong plants by 20 to 25 per cent by mid-November.

It says 350 jobs, or 15 per cent of the manufacturing workforce, will go.

That is on top of 600 jobs to be scrapped from the company's Geelong engineering plant by 2010.

The announcement comes a week after a review of the Australian car industry recommended tariffs be halved to five per cent by 2010.

Spokeswoman, Sinead McAlary, says fewer people are buying large cars, but the company will start producing a smaller car in 2011.

"Global economic factors are starting to affect Australia's car industry," she said.

"We expect there to be a notable softening in new car sales for the rest of the year, and we're taking these actions to strategically position our business to match our production to market demand."

Unions and industry have been calling for a halt in the tariff cut but Australian Industry Minister, Kim Carr, says the issue of tariffs is not the primary cause of Ford's troubles.

"What we've seen in recent times is that the price of the Australian sedans has increased by about $AU8,500 as a result of currency movements...whereas the tariff is worth about $600," he said.

"It's quite clear that there are much larger issues at stake here than the tariff."

Mr Carr says other issues such as market access, the industry's export capacity, petrol prices and increasing interest rates have all contributed to difficulties in the industry.

Mr Carr and Prime Minister Kevin Rudd are due to meet with head of Ford next Monday.

The Australian Government is yet to respond to the review of the car industry.