The Knock-On Effects Of Ford's Job Cuts Could Be Huge

The closure of Ford production lines in Australia means the direct loss of around 1200 jobs at its two plants. It’s a grim day for the company, Australia’s manufacturing sector, and the towns of Broadmeadows and Geelong where the jobs will go.

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But as with any announcement of job losses, there are knock-on effects on suppliers to the moribund operation.

And Australia’s Reserve Bank has some serious concerns about what could happen with the cessation of Ford’s production.

Aaron Patrick reports at the AFR that in an internal memo, Reserve officials say: “Liaison with suppliers indicates that while Ford is a relatively small customer, a reduction to only two local producers would significantly increase their demand risk.”

While Ford is one of the smaller customers for parts makers, the sector is already frail because of weakening demand for local parts and Ford’s closure could be the proverbial straw to the camels back for some of them.

More at the Fin.

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