Come October 2016, Ford Motor Co. (NYSE:F) will not only be saying “Cheerio” to Australia, but also to the Ford Falcon, a vehicle that has exclusively been produced in Australia.
Though the Falcon has attracted the envy of some American rear-wheel drive fans, it was only sold in the U.S. until the early 1970s due to its small version of the car not proving to be as popular among Americans. Since then, it has been made exclusively in Australia, and is now available in a sport utility model called the Falcon Ute.
But as Ford sales in Australia have taken a turn for the worse, so too has the Falcon. The country has sold less than 20,000 Falcons annually in the past two years. According to The Detroit News, Bob Graziano, president and CEO of Ford Australia told journalists Thursday, “The Falcon name is inextricably linked to Australia and being produced here … We will retire that name when we retire that vehicle (in 2016).”
The fate of other cars based on the Falcon platform or built for the Australian market has yet to be determined. Though, in the future, Ford still plans to offer Australia the Focus compact car, Ranger pickup truck, and Kuga SUV, imported from others countries, the automaker has not yet made a decision about the Ford Territory sport utility vehicle.
The downfall of the Ford Falcon is reflective of the deterioration of the Ford industry in Australia as a whole. The automaker says it has lost about $581 million in Australia during the past five years, which has prompted it to announce the closing of its two plants in the country in 2016, leading to the loss of 1,200 jobs.
The root of the problem? Australia’s dollar. The recent rise in its currency, up 77 cents versus the yen, has led the automaker to struggle against sliding sales, high costs, and a high Australian dollar. Its strong currency has crippled the local industry’s ability to compete with imports. And Japanese Prime Minister Shinzo Abe’s campaign against deflation to drive down the yen isn’t helping. Cars made in Australia slumped to 12.6 percent of total sales in 2012 from 80 percent in 1984, as reported by Bloomberg.
Both Australian Ford workers and certain major political players are hurting after its announcement on Thursday. As Ford prepares to lay off 1,200 of its 3,000 workers, all eyes are on Prime Minister, Julia Gillard, whose Labor Party has been attacked for its mismanagement of the economy. On Thursday, Gillard attempted to silence her critics by introducing government packages totaling A$51 million to support suppliers and communities affected by the Ford plant closures.
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