Gerard McManus
February 06, 2008 12:00am - Herald Sun
THE Rudd Government wants to axe a $20 million grant to Ford promised by its predecessor.
The Rudd razor gang decided in December to ditch the grant, which could jeopardise plans to build a new four-cylinder Ford at its Broadmeadows plant.
But the new Government has since received legal advice that Ford could pursue a legal claim based on a breach of faith.
The Herald Sun learned of the Ford setback on the same day Mitsubishi announced it would close its Adelaide plant.
In May 2006, the former Howard government pledged $52.5 million in special assistance to Ford.
Ford has received $32.5 million, but the remaining $20 million was not due to be paid until 2009-10.
The grant was intended to help Ford start production on a new Falcon project, known as E8.
But last July Ford sought to modify the agreement so the money could be spent on developing the four-cylinder Focus.
Production of the Focus, Ford's first locally made small car in a decade, is due to start at Broadmeadows in 2011, creating 300 jobs.
But the new contract between Ford and the Government was not formally amended before the November federal election.
Sources said the Government's strategic Budget committee of Cabinet met on December 18 and discussed axing the grant.
Subsequently, the Australian Government Solicitor advised the committee Ford could sue if it proceeded with its decision.
Saved!!!!
This plant will now remain open beyond 2010.
The Forewarning - 11th July 2007
D Day - 18th July 2007
Workers on their way to the meeting room to be told of the devastating news - The Geelong Engine Plant closure
The aftermath - Workers vent their frustration & anger!
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The Ford Geelong Plant
The Human Face of the Ford Geelong Engine Plant Closure
Bye bye American Pie: Ford Sacks 600 Workers
Source: Geelong Visual Diary - July 07
Jeff Whalley, 19th July 07
Long-time Ford employee Susie Baykiz was among the hundreds of employees coming to grips with yesterday's announcement. FORD is gutting the city's iconic engine plant and sacking 600 workers.
Confirming the worst-held fears of many automotive workers, the announcement brought heartbreak and anxiety to those affected.
In Geelong for the announcement, Ford Australia president Tom Gorman said the shutdown was an essential part of making sure the company survived as car buyers turned away from fuel-hungry vehicles. "This is not an issue where one would say it is a failure of government policy. This is us responding to changes in the market place to secure the future of Ford in Australia,'' he said.
Mr Gorman yesterday said that the company would abandon the I6 engines made in Geelong in 2010 to be replaced with cheaper US V6 imports.
He said the new engines would be compatible with diesel fuel and would be used on the traditional Aussie-made Falcon, Falcon ute and Territory models.
"This is a difficult decision, on a very difficult day in the history of Ford,'' Mr Gorman said.
But walking out of the gates of Ford yesterday, worker Shaun Patching only expressed exasperation. "I'm pretty down, actually. I'm like all the other guys. I've got a wife and kids and a mortgage . . . they have left the whole of Geelong high and dry. This is going to have flow-on effects that are devastating to these people,'' Mr Patching said.
Political and city leaders scrambled to make comment and draw positives to a shell-shocked Geelong community.
Australian Manufacturing and Workers' Union federal secretary Ian Jones pulled no punches, equating its impact on Geelong to the Pyramid collapse in early 1990s.
"My understanding is that some 10,000 jobs within the region are dependent upon automotive manufacturing, with $250 million of salaries paid as a consequence,'' Mr Jones said.
Geelong Mayor Bruce Harwood said he was seeking urgent meetings with Federal Industry Minister Ian Macfarlane and State Treasurer John Brumby. "I will be seeking appropriate state and federal government assistance that is going to meet the needs of our workforce in the future,'' he said.
Meanwhile, Mr Macfarlane and Victorian Premier Steve Bracks announced a $24 million Geelong Investment and Innovation Fund to offer grants for projects which would create new jobs and investment in the region. "I'm confident (Ford's Geelong workers) will have new jobs through this,'' he told the Geelong Advertiser.
The Labor member for Corio Gavan O'Connor said he was also scheduling an urgent meeting with the Industry Minister. "Ford and Australian governments have a moral responsibility to this Geelong workforce which has already made significant contribution to Ford Australia's past profitability,'' Mr O'Connor said.
Jeff Whalley, 19th July 07
Long-time Ford employee Susie Baykiz was among the hundreds of employees coming to grips with yesterday's announcement. FORD is gutting the city's iconic engine plant and sacking 600 workers.
Confirming the worst-held fears of many automotive workers, the announcement brought heartbreak and anxiety to those affected.
In Geelong for the announcement, Ford Australia president Tom Gorman said the shutdown was an essential part of making sure the company survived as car buyers turned away from fuel-hungry vehicles. "This is not an issue where one would say it is a failure of government policy. This is us responding to changes in the market place to secure the future of Ford in Australia,'' he said.
Mr Gorman yesterday said that the company would abandon the I6 engines made in Geelong in 2010 to be replaced with cheaper US V6 imports.
He said the new engines would be compatible with diesel fuel and would be used on the traditional Aussie-made Falcon, Falcon ute and Territory models.
"This is a difficult decision, on a very difficult day in the history of Ford,'' Mr Gorman said.
But walking out of the gates of Ford yesterday, worker Shaun Patching only expressed exasperation. "I'm pretty down, actually. I'm like all the other guys. I've got a wife and kids and a mortgage . . . they have left the whole of Geelong high and dry. This is going to have flow-on effects that are devastating to these people,'' Mr Patching said.
Political and city leaders scrambled to make comment and draw positives to a shell-shocked Geelong community.
Australian Manufacturing and Workers' Union federal secretary Ian Jones pulled no punches, equating its impact on Geelong to the Pyramid collapse in early 1990s.
"My understanding is that some 10,000 jobs within the region are dependent upon automotive manufacturing, with $250 million of salaries paid as a consequence,'' Mr Jones said.
Geelong Mayor Bruce Harwood said he was seeking urgent meetings with Federal Industry Minister Ian Macfarlane and State Treasurer John Brumby. "I will be seeking appropriate state and federal government assistance that is going to meet the needs of our workforce in the future,'' he said.
Meanwhile, Mr Macfarlane and Victorian Premier Steve Bracks announced a $24 million Geelong Investment and Innovation Fund to offer grants for projects which would create new jobs and investment in the region. "I'm confident (Ford's Geelong workers) will have new jobs through this,'' he told the Geelong Advertiser.
The Labor member for Corio Gavan O'Connor said he was also scheduling an urgent meeting with the Industry Minister. "Ford and Australian governments have a moral responsibility to this Geelong workforce which has already made significant contribution to Ford Australia's past profitability,'' Mr O'Connor said.
Notable Quotes
“It was a disturbing sight to see the men filing into to the meeting room, knowing what was going to happen, what the devastating news would be” (Amanda Zachariah, Geelong Advertiser Thursday 19th July 2007)
‘You work hard to build plans, to build a family life, to build a home and to keep loved ones together. And suddenly everything we were looking forward to has lost its gloss’
(B. Sexton, Ford Worker – Herald Sun, Thursday July 19th 2007)
"It's a consequence of marketing reality and these decisions are made by companies from time to time," Mr Howard told reporters in Adelaide. (J. Howard, Prime Minister - Fairfax digital, July 18th 2007)
‘It means lots because of families, mortgages and the future and the Geelong economy’
(K. Pircek, Ford Worker - Geelong Advertiser Thursday 19th July 2007)
‘They should have come out clean and showed some respect to the people who worked here for many years and they didn’t do that’
(M. Vuksic, Ford Worker - Geelong Advertiser Thursday 19th July 2007)
‘…. I recall it wasn't that long ago we had a protest out the front of these very gates against the free trade agreement with the United States, because we knew what was going to happen was that instead of bringing jobs to this country, the jobs were going to be exported offshore to the US, and that's clearly what's happened in this case.’
(D. Oliver, National Secretary AMWU – ABC PM Thursday 19th July 2007)
‘When Ford told us they were considering this, I fell off my seat’
(John Brumby, Victorian State Treasurer - Geelong Advertiser Friday 20th July 2007)
‘…….Ford Geelong became like the famously doomed German warship, the Bismark on Wednesday. “Chased down, shot and killed”…..’
(J. Vitulic, Ford Worker - Geelong Advertiser Friday 20th July 2007)
‘…ACTU economist Nixon Apple said it was standard practice to assume that every direct sacking in the automotive sector triggered between two and three indirect job losses’
"There are flow-on effects to all sorts of areas," Mr Apple said.
'The National Institute for Industry and Economic Research, used by the State Government to model the economic benefits of major events, argues that the impact of sackings can be even larger, particularly for skilled, technological industries'
(Fairfax Digital – July 23rd 2007)
‘You work hard to build plans, to build a family life, to build a home and to keep loved ones together. And suddenly everything we were looking forward to has lost its gloss’
(B. Sexton, Ford Worker – Herald Sun, Thursday July 19th 2007)
"It's a consequence of marketing reality and these decisions are made by companies from time to time," Mr Howard told reporters in Adelaide. (J. Howard, Prime Minister - Fairfax digital, July 18th 2007)
‘It means lots because of families, mortgages and the future and the Geelong economy’
(K. Pircek, Ford Worker - Geelong Advertiser Thursday 19th July 2007)
‘They should have come out clean and showed some respect to the people who worked here for many years and they didn’t do that’
(M. Vuksic, Ford Worker - Geelong Advertiser Thursday 19th July 2007)
‘…. I recall it wasn't that long ago we had a protest out the front of these very gates against the free trade agreement with the United States, because we knew what was going to happen was that instead of bringing jobs to this country, the jobs were going to be exported offshore to the US, and that's clearly what's happened in this case.’
(D. Oliver, National Secretary AMWU – ABC PM Thursday 19th July 2007)
‘When Ford told us they were considering this, I fell off my seat’
(John Brumby, Victorian State Treasurer - Geelong Advertiser Friday 20th July 2007)
‘…….Ford Geelong became like the famously doomed German warship, the Bismark on Wednesday. “Chased down, shot and killed”…..’
(J. Vitulic, Ford Worker - Geelong Advertiser Friday 20th July 2007)
‘…ACTU economist Nixon Apple said it was standard practice to assume that every direct sacking in the automotive sector triggered between two and three indirect job losses’
"There are flow-on effects to all sorts of areas," Mr Apple said.
'The National Institute for Industry and Economic Research, used by the State Government to model the economic benefits of major events, argues that the impact of sackings can be even larger, particularly for skilled, technological industries'
(Fairfax Digital – July 23rd 2007)
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