After reading the above article. Answer the following questions: a. What was the
ID: 357350 • Letter: A
Question
After reading the above article. Answer the following questions:
a. What was the exchange rate between US and Australia dollar at the time the article was written? Explain.
b. Using the exchange rate from (a), what is the car insustry’s annual contribution to the Australian economy in US dollars? Explain.
c. According to the article, approximately how many exmployees did General Motors and Toyota Motor Corporation have in Australia in April 2013? Explain.
d. What was Ford’s labor productivity in Australia at the time the article was written? Explain.
e. According to the article, what’s the labor productivity of Australia’s Car industry? Explain.
f. How many Australia-made cars were sold in April 2012? Explain.
g. In a paragraph or two, suggest other options Mr Graziano, President of Ford Australia, could have considered to keep the plants open?
16 F?NANe. re Times S/L 113 COMPANIES Ford to end Australia production CARSthe high cost of doing busi A$600m over five years. linked into Ford Australia's support and labour costs, Mators and Toyota Motor Decision ie restult o ness in Australia, the small Ford's decision is the lat assembly operations in [the some of which we did not have been struggling to billons of dolars in govern job cuts Our costs are double sures facing the manufac under 50,000 workers, Australia. It produces less cut 12 per cent of tts local scale of the market and est blow to the Australian state o Victoria. decision to close two manu been struggling to compete utes about A15bn a year ian taxpayers" he said.b of Victoria mounting lasses mouting losses for the car industry, which has think would be palatable to compete with foreign com The car industry contrib any government or Austral- petition in spite of receiving Two plants to shut with 1,200 t of Burope and nearly turing sector in Australia according to the Reserve than 40,000 vehicles a year, workforce and reduced car By Nell Hume in Sydney four times Ford in Asia,Ins Willox, chief execu Bank of Australia which means it has not production because of the satd Roh Grazisno, presi. tive of th Australian Mr Craziano said Ford been able to reap the bene strungth of the dollar Ford is to cease production dent of Ford Australia. Ford Industry Group said Ford's had explored a number of its of scale ejoyed by its agairst the ren had made in Australia by 2016 and cut has been manufacturing in decision was a "watershed options to keep the plants operations in Asia about 1,200 jobs-almost Australia since 1925. Japanese imports cheaper. moment" for the manufac open but it could not make Ford will, however, retain Industry figures pub The move to end local turing sector. The loss of the numbers vork because 200 dealerships in Australia lished earler in May production came as Ford 1,200 jobs over the next of its "uncompetitive cost and a product development showed only 8,500 Austral- ness case for producing Australia reported an three years is deeply con- structure" in Australia. centre, which employs more ia-made cars were sold in half its local workforce vehicles locally "did not A$141m (USS136m) loss cerning as are he implica "We also modelled some than 1,000 people stack up" April a 16 per cent fall com- for the year to December tions for the many busi pretty aggressive assump Australia's three car man: pared with the same period The US carmakar blamed and losses af almost nesses and employees ions about government ufacturers Bord. General a year agoExplanation / Answer
Exchange rate between US and Australia at the time when the article was written is 1.037. It means 1 US$ equals to 1.037 AUS$ at that time. This is revealed because in the fourth paragraph of the article, the loss of Ford Australia is give both in US dollars and in Australian dollar. The loss was US$136 million which is 141 million in Australian dollar. And by dividing the amount in A$ to US$, we can calculate the exchange rate between these two countries. The car industry’s annual contribution to the Australian economy is given in Australian dollars, i.e. A$ 4.5 billion. The annual contribution in US$ is 4.5x1.037=4.67 US$. In the very first paragraph, it is mentioned that Ford will cease the production that will cut 1200 jobs, half of the local workforce. This means the workforce of Ford at the time article was written is 1200x2=2400. According to the Reserve Bank of Australia, the car industry in Australia employs approx. 50000 workers. Australia has three main car manufacturers- Fort, Toyota and General Motors. So, in order to calculate the no of employees Toyota and GM have, we have to deduct the employees of Ford, i.e. 50,000-24000= 47,600 employees. Labour productivity is the amount of goods and services produced by one hour of labour. It is basically the ratio of output to input. Australia’s car industry labour productivity is amount of contribution through cars manufacture divided by total numbers of workers in Australian car industry. 4.5 billion/50,000 workers. This is equal to 90 billions per workers. In April 2012, 8,500 Australian made cars were sold. This was according to the industry figures that were published in May, 2012. The figure is 16% lower as compared to the previous year sale of the Australian made cars.
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