LATEST: Ford Australia has announced it will slash jobs — and production — at its Broadmeadows and Geelong plants by almost a third as slow sales of its Falcon large family car bite hard.

The company today announced up to 440 workers, mainly from its factories, would be offered voluntary redundancies as part of a massive restructure of its workforce taking place over the next three months.

The number of cars made in Victoria will be cut from an average of 209 a day to just 148 a day from November, with the car maker at first offering voluntary redundancies before considering a compulsory program "if the required reductions aren't reached", the company said in a statement.

Workers at the car company were this morning told of the hundreds of job losses.

The cuts are to be shared equally between the company's Broadmeadows and Geelong manufacturing plants.

A union official said Ford shut its Geelong production line for 15 minutes this morning as staff were briefed. He said more than 200 jobs would go in Geelong, which would hit the community hard.

The official said staff were not given details about redundancy packages and compulsory redundancies were likely as not enough workers would volunteer to leave.

Ford Australia President and chief executive officer Bob Graziano said despite the redundancies, the company was committed to continuing to make vehicles in Australia.

"We understand that, unfortunately, the impact on our employees will be significant, but implementing this structural change is essential to ensure the longer-term health of the business, which is important for our employees, our suppliers and the communities in which we operate," he said in a statement.

"All employees who take up the redundancy will receive a competitive redundancy package, including training and career counselling; and we will work closely with them and our union partners to help our employees make the transition successfully."

Ford cut 240 jobs at its Australian operations last year.

Earlier this year, Ford received more than A$100 million (NZ$128m) from the federal and Victorian governments to ensure the company keeps its Victorian operations going until at least 2016.

The federal secretary of the Australian Manufacturing Workers Union, Dave Smith, said the job cuts were a "kick in the guts" for workers.

He said it was no surprise that Ford was preparing to lay off workers as the car industry was going through "really difficult times".

"They have a good product but they just can't sell the passenger sedan and that's led to more than 400 jobs being lost," he said from a union conference in Perth.

"It's a kick in the guts and what's unfortunate this time is that when they go to seek voluntary redundancies they will not get the numbers."

The union official also warned that there would be a flow-on effect to suppliers.

It is believed the union was caught on the hop by Ford's announcement and was this morning scrambling to reach high-ranking delegates to organise a crisis meeting.

As part of the production changes announced today, Ford will build fewer Falcon family sedans and instead concentrate on sales of its more successful Territory soft-roader. According to Ford, the Territory will account for half of the vehicles heading down its production lines.

Territory sales have spiked since the car maker last year introduced a more fuel-efficient turbo-diesel V6 version to address the high thirst of the locally built six-cylinder petrol engine.

The diesel-engined model now accounts for seven out of 10 Territory soft-roaders sold. The Ford Falcon last month slipped out of the top 20 best-selling cars in Australia as buyers fail to warm to a more fuel-efficient turbocharged four-cylinder version introduced earlier this year.

Documents revealed to Fairfax Australia show that the new four-cylinder version of the large family car has failed to make a showroom impression, with more sold to Ford employees than to private and fleet buyers.

Last month, Ford said it would close the Broadmeadows and Geelong plants for a seven-day period in July after 1800 workers were stood down for three days when a key supplier went into administration.

The company is facing a 24 per cent slump in year-on-year Falcon sales and a massive $290 million annual loss, which was announced in May this year.

Premier Ted Baillieu is expected to comment on the job cuts later today.

- The Age