Toyota pulls the plug on Australian factory

By AP Time of article published Oct 4, 2017

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INTERNATIONAL - Toyota closed its Melbourne factory, ending 54 years of production by the Japanese firm in Australia, the first country outside of Japan where the company made cars.

The company was Australia’s biggest vehicle manufacturer in the past decade, with 70% of its cars exported, mostly to the Middle East. Output at the Melbourne plant peaked in 2007 at 149000 cars.

When the final Camry sedan rolled off the production line, 2700 workers became un- employed. The closure comes after iconic local brand Holden announced that it planned to shut down its Adelaide factory this month, and Ford, which pioneered local-based car making in 1925, closed its last two plants last year.

Industry analysts forecast the loss of thousands more jobs in car-related industries. Research by the University of Adelaide has predicted a worst-case scenario of 200000 lost jobs nationwide owing to the car industry’s collapse, which would take A$29 billion (R309bn) out of Australia’s GDP annually.

File picture: Mick Tsikas / Reuters.

Professor John Spoehr, who co-authored the university’s report, said the plant closings and resulting loss of supply chains would have a wide impact. The factory closings have raised pressure on Australia’s conservative government over job losses.

“This is a sad day for these thousands of workers and their families, and it’s a sad day for Australia,” Federal Opposition Leader Bill Shorten said yesterday. “Other countries, including the US, Germany and Sweden, contribute much more than Australia per capita to their car industries.”

But Prime Minister Malcolm Turnbull said changing tastes were the main factor leading to carmakers closing their Australian operations. “People stopped buying the sedans being made in Australia,” he said. “The manufacturers who’ve progressively closed their operations in Australia have made it clear it’s not because of a failure of government subsidies.”

Toyota blamed the “unfavourable Australian dollar”, high manufacturing costs and meagre economies of scale in Australia, a country of only 23million people. While Australia’s resource sector remains strong, manufacturing has suffered.

In this photo provided by Toyota Australia, employees gather around the last Toyota car produced in Australia as it leaves the production line in Melbourne, Tuesday, Oct. 3, 2017. Toyota closed its manufacturing plant in Melbourne, ending 54 years of production by the Japanese firm in Australia, the first country outside of Japan where the company made cars. (Toyota Australia via AP)

The global management consulting firm Boston Consulting Group ranks Australia the worst performer among 25 nations assessed in its worldwide manufacturing cost-competitiveness index. Costs are higher than in Germany, the Netherlands and even Switzerland, and Australian manufacturing wages rose 48percent in the past decade while productivity fell, it says. Meanwhile, car output dropped by nearly half from about 400000 cars in 2004.

Carmakers offered retraining programmes to help laid-off workers find new jobs.

Australian Manufacturing Workers Union’s national vehicles secretary Dave Smith said only about half the 1200 workers laid off from Ford’s factories last year have found full-time employment.

“This plant is more than just a car plant for the workers,” he said. “It’s a passion, it’s a part of their lives.”

- AP

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