Ford Motor Co. of Australia Ltd. announces plans to cut 640 jobs, about 10% of its workforce, citing reduced market demand.

Officials say they hope to have the cuts completed by Christmas through voluntary redundancies.

The auto maker is offering an extra week’s pay for each year of service – four weeks instead of three weeks – for workers taking a package by Nov. 29.

The move follows a recent visit to Australia by Ford Motor Co. Chairman Bill Ford, who insisted there was no chance the cash-strapped parent company would sell its Australian subsidiary.

Australian Mfg. Workers Union’s Victoria Secretary Dave Oliver tells the media Ford Australia also intends to cut 150 contract jobs and to re-deploy another 200 workers.

The job losses were signaled in October when Ford cut new-car production by 20% – from 65 units per hour to 52 – with its sales hurt by rising fuel prices and competition from rivals marketing newer products.

Doug Cameron, the union’s national secretary, says Ford’s decision could lead to new job losses in the supplier sector, as well.

“It’s quite clear the car industry in Australia is under pressure from globalization,” he says. “It’s under pressure because of the logistics and structure of the industry.”

Cameron wants the government to convene a meeting of auto industry players to come up with a plan to end the current decline. The domestic Big Four in addition to Ford include GM Holden Ltd., Toyota Motor Corp. Australia Ltd. and Mitsubishi Motors Australia Ltd.

General Motors Corp. has designated GM Holden as its engineering center for large-car platforms, and Ford recently tapped its Australian subsidiary to lead design of its new global light-vehicle architecture.

Cameron insists that is not enough. “(The Australian auto industry is) losing over 1,200 jobs a week,” he says. “There needs to be more innovation. We are very concerned that the federal government has no vision and no plan for the industry.”

A Ford Australia spokeswoman tells the media the auto maker remains committed to its Australian operations.

“We are still investing in Australia; we are still planning to build the next Falcon,” she says. “It is simply about making our production rates and the size of our business match what is current market demand.”