Ford Builds Cars in Thailand in for $6 an Hour..

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"MEET the Thailand workers that will be making your next Ford once the Broadmeadows assembly line falls silent forever this Friday — ending 91 years of car making in Australia for the US giant.
While the minimum wage in Thailand equates to less than $2 an hour, car assembly line workers are paid more generously — about $6 an hour, which is close to $12,500 a year.
But it’s nowhere near the average annual Australian car manufacturing worker wage of $69,000.
Cheaper labour costs are not the only reason Aussie jobs are being sent offshore.
Import tariff reductions — supported by both sides of politics across the past three decades — accelerated the demise of car manufacturing.
As the tariffs were removed, imported cars got cheaper — or better equipped — which had the instant affect of making Australian-made cars less appealing.
But no policy was more brutal than the Free Trade Deal with Thailand, introduced in 2005.
Since Australia agreed to lift the import tariff on cars from Thailand, we have bought 1,877,446 vehicles from our Asia-Pacific neighbour — from brands as diverse as Ford, Holden, Toyota, Honda, Nissan, Mitsubishi, Mazda and others.
In return, Australia has shipped to Thailand just 100 cars.
Not 100,000. Just 100 examples, of the Ford Territory, in 2012.
That’s because Thailand maintained hidden, non-tariff barriers while Australia opened its borders completely.
Thailand continued to impose higher registration fees on cars with larger engines. Ford and Holden produce large cars with large-capacity engines.
Ten years after the free trade deal was signed, Australia is shutting its doors on an entire industry and with it more than 50,000 jobs.
Australia was the only country in the world to manufacture cars and not have some form of protection for its local industry.
Now those jobs have been transferred to Thailand, known as the Detroit of the Asia-Pacific. It is the second-biggest source of motor vehicles in Australia after Japan and ahead of South Korea.
Thailand has been so lucrative for Ford it now has two factories there.
A joint venture factory with Mazda assembles the Ford Ranger ute — designed from scratch in Broadmeadows on Melbourne’s northern outskirts, and engineered on the roads near Geelong.
Ford also opened a brand-new Thai factory in May 2012. It makes the Ford Focus small car that was supposed to be built in Broadmeadows.
In 2007 Ford announced the Focus would be built in Australia. But exactly two years and one day later the company scrapped those plans. Thailand would build the Focus instead, for a fraction of the cost.
Both Ford facilities — in the country’s industrial heartland between Bangkok and its main ports in the Gulf of Thailand — produce a combined total of almost 500,000 cars a year, employ more than 6000 workers, and export to 130 countries.
Broadmeadows last year built fewer than 20,000 vehicles. The factory workforce has shrunk to about 800. And it has one export destination: New Zealand.
Ford Thailand worker, Ai, has been on the assembly line in the powertrain division for five years. He was at Broadmeadows a month ago for a two-week training session for Thai employees.
“I feel the closing of Australian plant is business as usual, their production cost are too high,” he told News Corp Australia.
Bee and Panti, two of the many women who work in the factory, reason “the news about (Australian factories) closing has been around for at least three years. I don’t feel bad for them (Australian workers) as they have been informed years in advance”.
It might be an industrial wasteland — albeit one dotted with palm trees — but conditions are good for the workers in a country where $300 a month is an acceptable working class wage.
“It’s a great place to work. The pay — it’s good but I would like more,” says Pitun, an assembly line worker.
As with everyone News Corp Australia spoke to outside the factory, Pitun says he’s pleased to work in clean and safe conditions.
Fleets of buses and mini vans transport workers back to their homes — some as far away as a three-hour drive to central Bangkok.
It’s not just the car assembly lines that have moved to Thailand. The parts supply industry has followed.
Across the road from one Ford factory is seat maker Futuris, a long-time Australian firm acquired by US private equity group Clearlake Capital in 2013.
“There are around 20 Australian auto-related manufacturing companies in Thailand — or companies with an Australian link,” Austrade Thailand senior trade commissioner Susan Kahwati told News Corp Australia.
“The majority of these companies actually established in Thailand before the announced closure of the car manufacturers in Australia. But many of these companies still keep their research and development activities in Australia,” Ms Kahwati said.
Indeed, it’s the case with Ford. Detroit will retain 1100 Australian designers and engineers based in Broadmeadows, Geelong and Lara (on the outskirts of Geelong) to work on future models that will be sold globally.
Their depth of expertise — critical to car development — doesn’t exist in China or Thailand in the Ford world. At least for now." http://www.news.com.au/finance/busin...4defcce8135da5
My comment "and FORD charge premium prices for their cars!! and they wonder they arent selling!!!" Ranger is an exception but Fiesta/Focus??? or would they more expensive ?????
As a nurse, I didnt earn $69,000 last year and thats with shift work!!!

[The Yeti]

All true, except it fails to address the poor quality control locally as well as the unions holding the car manufacturers over a barrel

[Wretched]

cost of living over there is a lot easier too compared to here, so while $6/hr seems like a pittance to us, it isn't too bad for them.

We've just priced ourselves out of work with higher wages, taxes, over zealous "work safety" regs, poor economic management and just having to do business here is minefield of red tape.
Just look at the number of people who start up, they shift overseas because it is far better to do business over there.
Even the company I work for, off shored everything that they could and are looking to close many offices here, going from ~5000 staff to just over 2500 in 2 years.
The sooner we smarten up the sooner we'll become more competitive.

[MethodX]

Does this mean the end of GM Daewoo jokes?

[Trump]

Originally Posted by Wretched

cost of living over there is a lot easier too compared to here, so while $6/hr seems like a pittance to us, it isn't too bad for them.

We've just priced ourselves out of work with higher wages, taxes, over zealous "work safety" regs, poor economic management and just having to do business here is minefield of red tape.
Just look at the number of people who start up, they shift overseas because it is far better to do business over there.
Even the company I work for, off shored everything that they could and are looking to close many offices here, going from ~5000 staff to just over 2500 in 2 years.
The sooner we smarten up the sooner we'll become more competitive.

It isn't a case of us becoming smarter to compete. Instead of the developed nations bringing the developing nations up to our (current) living standard, globalisation has done the reverse and destroyed our manufacturing base. Our living standard is being decimated and will ultimately be brought down to a level only marginally higher than the developing world.

[FoxtrotGolfXray 5.0]

Originally Posted by Loud_Noises

It isn't a case of us becoming smarter to compete. Instead of the developed nations bringing the developing nations up to our (current) living standard, globalisation has done the reverse and destroyed our manufacturing base. Our living standard is being decimated and will ultimately be brought down to a level only marginally higher than the developing world.

The highlighted bit doesn't make sense. At the start of the sentence, you are referring to living standards whereas at the end of the sentence, you are referring to manufacturing.

Also, I completely disagree with your assessment of the impacts of globalisation. As someone who lived in a third world country in the late 70s, and having returned to that exact same location (Penang in Malaysia) only a few years back, the difference is night and day. Of course, that doesn't mean that the standard has changed for everyone in those nations, but it IS slowly improving.

And I'm sure other similar countries, such as India, Thailand, China, etc are very similar.

But I also tend to agree that globalisation will have the effect of normalising the worlds' living standard, in a similar way to the way a country's living standard also normalises.

[PepeLePew]

Easy on a Ford forum to respond to the mentions of Ford. But it's a fair article if viewed overall for Ford Holden and Toyota. They all play the same game whether Thailand or elsewhere. Shareholders are into return and sentiment fades quickly. Where is the next Commodore due to be built? The old GM Daewoo plant perhaps? ;) The Cruze was just crap not the plant, but at least Fishermans Bend turned it into something decent in its latter years (well some of them). That sort of talent and localisation may be our biggest loss.

Wouldn't it be great for something to rise from the ashes of our industry? Give it time, the world changes. Equally you may be blue in the face if you hold your breath for it.

[castellan]

Originally Posted by Loud_Noises

It isn't a case of us becoming smarter to compete. Instead of the developed nations bringing the developing nations up to our (current) living standard, globalisation has done the reverse and destroyed our manufacturing base. Our living standard is being decimated and will ultimately be brought down to a level only marginally higher than the developing world.

Australia voted to become a 2ed world people, just that the polys did not put it in words that way.
We have squandered our nations inheritance that our forefather's worked towards, one world Marxist government is coming and with the political correctness gaining even more power year by year, even the right to free speech is truly being lost, all will only become a number and live in fear of big bro the new age derelict dipstick.

[Trump]

Originally Posted by psychobimbo

The highlighted bit doesn't make sense. At the start of the sentence, you are referring to living standards whereas at the end of the sentence, you are referring to manufacturing.

Also, I completely disagree with your assessment of the impacts of globalisation. As someone who lived in a third world country in the late 70s, and having returned to that exact same location (Penang in Malaysia) only a few years back, the difference is night and day. Of course, that doesn't mean that the standard has changed for everyone in those nations, but it IS slowly improving.

And I'm sure other similar countries, such as India, Thailand, China, etc are very similar.

But I also tend to agree that globalisation will have the effect of normalising the worlds' living standard, in a similar way to the way a country's living standard also normalises.

My apologies, I could have worded it better. What I was trying to say was that globalisation has done the opposite and decimated the living standard of the developed world. That has happened due to the destruction of the manufacturing base we used to have.

Globalisation has been a destructive force. The only institutions that have benefited from its rampant proliferation have been the trans-national corporations. The masses caught up in its wake have not seen any tangible benefit or improvement in their lives; token investments in public infrastructure (especially in SE Asia) aren't able to mask it. And that isn't even mentioning the wholesale environmental destruction in the pursuit of wealth and profit under the umbrella of globalisation.

As such, Ford and every other corporation are complicit in this crime. Yes, I will label globalisation a crime, a crime against humanity.

[jandj]

I feel it's been Govco and the unions since the 80s that have been the demise of the car industry here in OZ. And the FTA is the final blow for Australia and other western developed nations . Just my 2c.

Cheers Jason.

[vztrt]

I like how people think its cheap wages that made the companies build in Thailand. Thailand throw lots of money in the form of tax incentives to have a manufacturing base (like Australia did back in the day).

It will get interesting when 3D printing gets to the production level. Like manufacturing in the US low amounts of jobs but efficency has exponentially inceeased since the late 70's.

[SumoDog68]

Originally Posted by vztrt

I like how people think its cheap wages that made the companies build in Thailand. Thailand throw lots of money in the form of tax incentives to have a manufacturing base (like Australia did back in the day).

It will get interesting when 3D printing gets to the production level. Like manufacturing in the US low amounts of jobs but efficency has exponentially inceeased since the late 70's.

I like how people think that cheap wages in Thailand played no role in deciding to manufacture in Thailand. Wages are a cost and are combined with government incentives to form a package.

[ivorya]

Welcome to globalisation peoples where Cheapest is aways the best..... for shareholders.

How many years before these workers start uprising and the build cost become to much for these companies?

[castellan]

Originally Posted by ivorya

Welcome to globalisation peoples where Cheapest is aways the best..... for shareholders.

How many years before these workers start uprising and the build cost become to much for these companies?

Well it's just natural for people to try to get the best they can get out of there investment at the time, but common sense happens just to go out the window, as to a healthy society looking towards the future is just totally disregarded.

I am for the 3ed world to progress, but one should know if it's foundations are not built on solid grounds, well it may become a disaster as many a time in history has proven that.

I hear People claim that China etc has all the money nowadays, no they don't they are indebt too there eye balls, yes they have big investment going on of other nations money and that's all it is. a worthless backward nation only x years ago is now number one in the world, BS ! people with money or Super funds are not going to invest in USA or Australia because who would invest in a nation that's hell bent on trying to destroy it's self in every position you look to invest.

[Vesper Martini]

If anybody is curious heres a clip below of the 2013 Focus getting manufactured in Thailand & its workers
https://www.youtube.com/watch?v=_fuA0rbw0sc



Whether Thai or migrant, all workers are treated equally. Most factories pay wages above the legal minimum, plus overtime and other fringe benefits such as working uniforms and boots. Transportation, accommodation, meals, and activities to celebrate festivals of Thai and other cultures attached to the migrants’ homelands are also provided for free or subsidised.

[malazn mafia]

One way free trade agreements are a disgrace. Don't ever intend to support Ai, Bee, Panty and Spitoon who hold no sympathy for John, Simon and Greg who are just about to lose their livelihood. Will never buy a Thai made car, regardless of what badge it wears.

[stang65]

Originally Posted by Loud_Noises

It isn't a case of us becoming smarter to compete. Instead of the developed nations bringing the developing nations up to our (current) living standard, globalisation has done the reverse and destroyed our manufacturing base. Our living standard is being decimated and will ultimately be brought down to a level only marginally higher than the developing world.

This....Are you going to work for $6 an hour. You can't have an even playing field if cost of living is $3000 a year there and $50,000 a year here. We will become a third world country if the government doesn't stop taxing companies to the hilt and lets them move to other countries to manufacture.

Might as well close our borders and become self sufficient.

[Franco Cozzo]

Lots of finger pointing at trade unions and OHS laws.

At the end of the day trade union/EBA or not how does one compete with $6/hour?

The thing with large multinational companies, is a tiny saving anywhere turns into a huge saving on paper just down to scales of economy, something that makes sense for Ford to cost cut, doesn't make sense for me to do.

[roddy1960]

Originally Posted by malazn mafia

One way free trade agreements are a disgrace. Don't ever intend to support Ai, Bee, Panty and Spitoon who hold no sympathy for John, Simon and Greg who are just about to lose their livelihood. Will never buy a Thai made car, regardless of what badge it wears.

G'day ...Check this out http://www.austrade.gov.au/Australia...ies/automotive and this https://dfat.gov.au/trade/resources/Documents/thai.pdf See what we were up against...No chance.....Sucks... According to this we export around 4.3 billion dollars worth of goods and import about 13 plus billion bucks worth..That despite their population is nearly 69 million people compared to 25 million here...Any economists on AFF to explain if this is FTA working fairly ...I have my doubts but pretty sure we are hanging on to the thin edge of the wedge..someone prove me wrong please....Cheers Rod...

[XD 351 Ute]

Originally Posted by Bevsta007

Whether Thai or migrant, all workers are treated equally. Most factories pay wages above the legal minimum, plus overtime and other fringe benefits such as working uniforms and boots. Transportation, accommodation, meals, and activities to celebrate festivals of Thai and other cultures attached to the migrants’ homelands are also provided for free or subsidised.

It's good to see that the multinationals are attempting to look after them.
Most big companies did that here in Australia for many years until things became too tight financially.

How long before the wheel turns full circle?

Ed

[simon varley]

sad that in the week of the closure, Dowling has to resort to a piece like that. not unexpected however.

[jandj]

Originally Posted by Franco Cozzo

Lots of finger pointing at trade unions and OHS laws.

At the end of the day trade union/EBA or not how does one compete with $6/hour?

The thing with large multinational companies, is a tiny saving anywhere turns into a huge saving on paper just down to scales of economy, something that makes sense for Ford to cost cut, doesn't make sense for me to do.

Mate I understand where you're coming from , a company needs to be profitable in todays climate. But when you take a multiple things that have lead to the demise of manufacturing in this country over the years , on top of the cost of living in Australia and the FTA.
It makes sense for any company to move manufacturing overseas.

[vztrt]

Originally Posted by SumoDog68

I like how people think that cheap wages in Thailand played no role in deciding to manufacture in Thailand. Wages are a cost and are combined with government incentives to form a package.

The money spent in the design makes the wages insignificant. The cheap wages cemented Ford building in Asia....there are many more reasons why Thailand was chosen.

[CyberWasp]

It all goes back to the Lima Declaration in the mid 70's.
Seeing I have not seen any civil unrest or anybody protesting openly in the streets about it, most of the population in this country must be in favor of it, as each successive government has gone about the business of implementing the declaration.
The problem is Australian was the only country dumb enough to fully implement it, and we are now seeing the full effects.

[The Yeti]

Originally Posted by stang65

This....Are you going to work for $6 an hour. You can't have an even playing field if cost of living is $3000 a year there and $50,000 a year here. We will become a third world country if the government doesn't stop taxing companies to the hilt and lets them move to other countries to manufacture.

Might as well close our borders and become self sufficient.

Because they will hire a lot more at $6 an hour than they do at $26

If you've ever been to a Thai factory you will see squillinns of people doing tasks we wouldn't do.

[Franco Cozzo]

We won't be designing cars in the long term either, give it until 2030 and I bet we won't have the design side of it either, they'll be focusing on bringing Chinese engineers up to scratch.

[XWGT]

I really dont know why they bother with these types of articles.
Its been said over and over but no one wants to accept the truth. Ford, globally, decided on reduced vehicle lines to meet a world market manufactured in the most efficient locations. Falcon was dead no matter what under that strategy. Yes the FTA with Thailand made the economics worse for Ford Aus, but it was never going to survive anyway under global Ford strategy.
In a nutshell Australia traded agriculture for auto manufacturing with Thailand, which may have been a stroke of good foresight on the basis that Ford where always going to close, and that would inevitably let GM follow.

[Vesper Martini]

Originally Posted by The Yeti

Because they will hire a lot more at $6 an hour than they do at $26

If you've ever been to a Thai factory you will see squillinns of people doing tasks we wouldn't do.

agreed You only have to travel there to understand their work eithic.

[Winter XR8]

A guy I work with buys land in Thailand. He reckons for the cost per square meter, you can't even buy cardboard in Australia

[blueoval]

The work ethic in Thailand is, 'you don't work, you don't eat'. They also do not have social security or cushy pensions over there in case one loses their job or can no longer work. Holidays? Whats that? Sick leave? pfft unless you are on your death bed, then you are at work. 3 generations of families live under 1 roof and anyone old enough to work is put to work to help pay for the family who are too old, injured or taking care of family responsibilities within the household. They also do not get weekends. Only traditional Thai/buddhist celebrations.

Family comes first in Thailand, not matter the cost or what you do to make money. The type of work you do gets over looked for the sake of maintaining family minimums. That is why you see many forced to go into the sex trade, as well as doing 'menial' jobs we westerners would deem beneath us just to make ends meet.

For a Thai to get $6AU or $6US an hour is a godsend to them. It offers a sense of consistency compared to an otherwise questionable or harder form of working. Sure its consider slave labor for western society, but as someone already said, its pretty good for them over there.

I am Thai btw.