Magazine of Socialist Action in Australia

Ford announces more job losses

Reading Time: 4 minutes

Government and union response inadequate

The Ford motor company in Australia will sack 350 workers before the end of the year. This equates to 15 per cent of Ford’s manufacturing workforce in Australia. In addition to these sackings a further 600 jobs will go when Ford closes its Geelong engine plant in 2010.

The Australian Manufacturing Workers Union (AMWU) has warned that the job losses could flow on to 2000 other workers in the automotive components sector. The union said for every job removed at Ford, six to seven could be lost across the industry.

Ford blamed economic conditions, rising petrol prices and changing consumer demand for the redundancies. This is despite the fact that in April this year Ford announced a net income of $100 million for the first quarter of 2008 with total revenue of $43.5 billion across its entire operation.

Ford Australia has reported an $87 million loss on $3.3 billion revenue for the calendar year of 2007. But often these losses are on paper only and are a result of write downs on plant, equipment and property. Unions should demand that Ford open their books for public inspection.

Ford has also received millions of dollars in tax payer funded handouts over a period of many years. Effectively a subsidy of $2000 has been paid out on each of the 388,989 vehicles produced in Australia last year.

Given these massive handouts you would think that the Federal Labor Government might have taken action against Ford or announced plans to protect these jobs. Unfortunately nothing could be further from the case. Treasurer Wayne Swan said the government could not protect the jobs at Ford but would ‘try’ to ensure the industry’s future.

Federal Industry Minister Kim Carr said he expected further job losses throughout the automotive industry. These same politicians regularly call on workers to exercise wage restraint while standing by and watching the car companies squander millions.

Unfortunately the response from the AMWU has also been totally inadequate. The best AMWU Victorian State Secretary Steve Dargavel could come up with was a call for a freeze of car tariffs at 10 per cent.

If you didn’t know any better you might have thought that AMWU Vehicle Division Secretary Ian Jones actually worked for Ford’s PR department. Jones said the Falcon had been selling “very well at the moment” but Ford were “taking hits”. “The industry is in a difficult situation at the moment” he said.

The union has not even publicly criticised Ford for these job losses let alone announced a campaign to defend the jobs. The reason for this is not necessarily that these union leaders are bad people. It is because their politics are totally inadequate to deal with the problems that capitalism throws at workers.

The leaders of the AMWU support tariffs or import controls as a way of protecting local jobs. They think the best strategy is to beg their mates in the Labor Party to set tariffs at higher levels and to dish out subsidies to the car companies. Socialists on the other hand don’t support import controls and tariffs per se. Tariffs are an indication of the weakness of local capitalism.

Tariffs lead to reduced competition for local industry, allowing the bosses to pump up the price of their goods. Instead of reinvesting their profits in technology to produce smaller more environmentally friendly cars, Australian car industry bosses have merely pocketed and squandered the profits they have reaped over the past decades.

Increasing tariffs now would inevitably mean workers bearing the cost through the increased prices for cars. It would also export unemployment to overseas workers. Inevitably, such a course would eventually result in retaliatory tactics from other countries, thus affecting the ability of the car companies to sell cars overseas.

Recently ex-Victorian Premier Steve Bracks was employed by the Federal Government to deliver a report on the Australian car industry. The report called for tariffs to be reduced from 10 to 5 percent but advocated for more tax-payer funded handouts to the car companies.

Bracks’s recommendation was that carmakers should be given an extra $2 billion in corporate subsidies from 2010 to 2020. That would bring the total assistance to the industry over the next decade to $3.5 billion.

While tariffs are no solution, the further reduction of tariffs or introducing ‘free trade’ is equally no solution. Thousands of jobs in the manufacturing industry have already been lost as a result of tariff cuts. The Socialist Party calls for the inspection of the financial accounts of companies like Ford and for industrial action to defend every job. Anything less is accepting that it should be workers and not bosses who bear the brunt of economic downturns.

Unless the union movement develops its own independent working class politics and refuses to accept the bosses’ arguments about job losses they will find that thousands more jobs in manufacturing will be lost. Already over 100,000 manufacturing jobs have gone over the past decade, it’s time for some policies that will turn this around.

Neither tariffs nor free trade can solve the problems of the Australian economy or the working class. When companies are run purely for profit and not for the benefit of society we can expect that bosses will throw workers on the scrap heap whenever it suits them.

If companies like Ford want to engage in mass sackings, especially after accepting millions of dollars in hand outs, they should be taken into public ownership. A democratic plan of production based on the needs of ordinary people is the socialist answer to these problems.

By Socialist Party reporters


The COVID-19 pandemic has laid bare many of the problems with capitalism. The Socialist strives to explain the systemic causes of this crisis, and reports about the issues that are important to working people. We also help to organise struggles against the powers that be.

We don’t receive a cent from big business or governments. Our work is fully funded by our supporters. Even if half the people who read our website every month donated a few dollars each we would raise thousands to help our work!

We need organisations of struggle now more than ever, so if you support what we do please consider making a donation.

One-off or regular donations can be made securely HERE.