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Ford closure shows subsidies a waste of money
The government should stop propping up foreign automotive manufacturers, says The Centre for Independent Studies, as news breaks of Ford announcing its closure of Broadmeadows and Geelong manufacturing facilities in 2016 and leaving 1,200 workers jobless.
Automotive manufacturers have received billions of dollars from government, yet job losses in the industry continue to mount – proof that short-term, stop-gap subsidies are a waste of money, inefficient and fail to secure Australian jobs.
Just six months after receiving $34 million in January 2012, Ford announced 440 job cuts; not even 12 months have passed and Ford has now announced shutting down its manufacturing facilities in Australia. Ford is not alone in shedding jobs: 500 Holden workers have lost their jobs so far this year.
‘The closure of Ford manufacturing and the job cuts in the car industry will have flow on effects on suppliers, and unfortunately, more job losses are likely,’ says Simon Cowan, a research fellow at The Centre for Independent Studies.
‘Government and industry need to look at ways to transition vulnerable workers to efficient industries.’
Manufacturers of large cars in Australia have seen sliding sales over recent years, with new Ford Falcon sales down by more than 25% in 2012. New car sales overall in Australia rose 10%, which indicates manufacturers are not keeping up with the demand for smaller, more fuel-efficient cars.
‘Governments have been handing out billions of dollars to foreign carmakers to make large cars that Australians aren’t buying,’ says Mr Cowan.
‘We need to abandon corporate welfare and divert the billions in funding to worthwhile programs like DisabilityCare.’
‘This is a sad day for car industry workers in Broadmeadows and Geelong. We should support these workers and help them retrain and find new jobs, rather than trying to prop up failing car manufacturers.’
Simon Cowan is a Research Fellow at The Centre for Independent Studies.
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