Car crash: Ford closes plants, Nissan recalls 800,000 vehicles

Nissan has been forced to call back thousands of motors due to a steering wheel fault, while US car giant Ford closes its Australian factories after 85 years.

by Rebecca Burn-Callander
Last Updated: 18 Jan 2016

It looks like Dick Dastardly has been interfering with Nissan’s production line. Last month, the carmaker was forced to recall 500,000 vehicles after a defect was found in the passenger airbag system. And now, 841,000 Nissan Micras and Cubes (only available in Japan) are being taken off the road because of a dodgy steering wheel. What next? Are the wheels going to pop like in Wacky Races?

Nissan has found that one of the bolts in the vehicle’s steering wheel was not tightened properly; the car literally has a screw loose. And while drivers of the affected motors are in no immediate danger, according to Nissan, the cars must be returned to the manufacturer as soon as possible so that the bolt can be fixed or the steering wheel replaced. In the UK alone, around 133,869 cars will be affected.

No accidents involving the cars have been reported, added Nissan, and the repairs will only take 15 minutes. Nevertheless, the news has alarmed motorists and shareholders alike; Nissan’s stock closed at just $23.4 last night, down 2.7%.

Ford’s having a tough ride today too. The US carmaker has announced plans to close all its Australian manufacturing plants by October 2016. The move will result in the loss of 1,200 jobs from the Broadmeadows and Geelong sites, which have been in operation since 1925.

The Aussie factories have been steadily losing money for five years, explains Ford, notching up losses totalling Aus$600m (£385m).  ‘Our costs are double that of Europe and nearly four times Ford in Asia,’ said Bob Graziano, the chief executive of Ford Australia. ‘The business case simply did not stack up.’

The Australian car industry has taken a real hit from the strength of its dollar (it's one of the strongest currencies in the world right now) against the weakness of the nearby yen (well, there had to be a downside to Abenomics). The Australian dollar has risen 29% against the Japanese currency over the past year alone, making Australian products extremely expensive by comparison. Despite all of the government’s attempts to prop up the industry – it pumped $5.4bn into the sector last year – General Motors and now Ford have both announced plans to pull out of the country.

This double whammy of bad news could just be just a bump in the road for Nissan and Ford. Both firms reported double-digit revenue gains in April due to the strong demand for truck pickups (Ford) and new models (Nissan). Indeed, Ford’s share price is up 0.13% to $14.97 in after hours trading. Shareholders are obviously relieved that its loss-making operations have been cut loose. But Nissan better make sure this is the last fault for a good long while if it wants to be spared further investor wrath. And get Muttley off the factory floor....  

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