Impact of Globalization on the Australian Automobile Industry case of Ford Falcon

Dominique Trual Molintas

MPRA Paper from University Library of Munich, Germany

Abstract: Globalisation demand on productivity tells of an extreme competition and low profitability in the World Automobile Industry which blatantly opposes competitive equilibrium as it is highly regulated. Regulatory measures primarily in reference with trade and followed by ecological protection. Trade protectionism curtails the threat of substitution by way of import quotas and tariffs, administrative barriers and subsidies. Government subsidies have reached millions of dollars, Australia AUD1966M, Germany 1303M and 2908M in America. In the category of environment protection, the Energy and Conservation Act of 1975 costs roughly USD 2000 on compliance per manufactured unit. These aside the high cost on advertising, development research and labour unrest; dampen production locations burdened by overcapacity: Germany and Italy, France and Australia, USA and Japan. In a fragmented value chain stretching across multiple industries, manufacturers thinly spread as production entails specialty knowledge and expensive tools. No single company controlling enough market shares to influence world industry decisions that might induce radical industry transitions. Many outfits close shop over prolonged business slowdown. Death of 80 year old National Treasure Ford Falcon Territory 2016 is a decision to end all losses over the past five years for the amount of 600 million dollars with 23 percent coming off 2012 fiscal year. This involves the retrenchment of 1200 Victorian jobs reasoned against low model volumes. Job loss accounts 650 workers from the assembly plant at Broadmeadows and 510 workers of the Geelong engine plant; after exhausting manufacturing alternatives to increase scale and competitiveness. Developing its presence since 1925, the plant is characterised as a vertically-integrated organisation with formidable technical capability and significant asset infrastructure. As a subsidiary of Ford Motor Company, it carries the corporate brand portfolio of Aston Martin, Ford, Jaguar, Lincoln, Mercury, Mazda, Volvo and Land Rover.

Keywords: Ford Falcon shutdown; Automobile Industry Highly regulated; Oligopoly; Disequilibrium (search for similar items in EconPapers)
JEL-codes: F4 F43 F6 F64 L5 (search for similar items in EconPapers)
Date: 2016-12-11
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