Oh what a terrible feeling for Toyota employees after the company announced yesterday it will axe 350 jobs from the Altona North factory in Melbourne.
Usually around 80,000 Australian-made Toyotas are exported annually to the Middle East. This year the number will be half that, said Toyota Australia president Max Yasuda. The decline is blamed mainly on the high Aussie dollar plus falling demand.
“The move sparked fears the job losses could snowball through to the parts supply industry, whose viability, and 40,000 jobs, depends on the number of cars made locally,” reported Andrew Heasley in The Age.
The export market has left Toyota too vulnerable, explains Philip King in The Australian:
“The Camry slide looks as terminal as the drop for those other locally made large sedans, the Falcon and Commodore.
The reality is that Toyota would need to add a second model to its factory to get local volumes anywhere near realistic levels; as Holden has done.
A shift to a domestic-only production is unlikely unless Toyota becomes much more competitive. More fundamentally, it would mean a complete about-turn on the very reason why Toyota has a factory here in the first place.”
The government needs to start addressing the high Aussie dollar before it destroys our manufacturing industry, writes Ian Porter in The Age:
“Toyota did not lay off a single person during the GFC, preferring to keep them on reduced hours and other duties.
Yesterday it sacked 350 people.
Message to the Prime Minister: this is serious.”
But what can be done? Porter offers up an idea that’s working in Brazil.
“Its government has introduced a temporary industrial products tax designed to lift the price of imports back to where they would have been in the absence of a rise in the value of the real. It doesn’t help restore export markets, but it does maintain equilibrium in the domestic market, keeping people in work and preserving skills and capabilities that would otherwise disappear, perhaps for ever.”
Manufacturing minister Kim Carr has an op-ed in the Herald Sun about the importance of the Australian car industry and why it needs to be maintained:
“I have little patience with commentators who insist on seeing this country as some kind of automotive backwater. Australia is one of only 13 nations with all the capabilities to take a car from the drawing board to the dealership — and we have sustained that position at a far lower per capita cost than most. Every Australian claims the benefits of the auto sector for less than $18 each. Every American is paying 14 times that sum.
So this is not the moment to be slashing our support, as Mr Abbott would have us do. It is time to prove to the world that this country is ready to make cars for the 21st century.”
If we lose our car industry, we’ll lose the rest of our large style manufacturing as well. But governments need to be smarter about supporting them, argues Terry McCrann in the Herald Sun:
“What we should NOT do is continue with the hopeless unfocused and indeed misfocused half-hearted but very expensive efforts to prop it up.
All this entirely bipartisan stupidity does, is just to put the industry on long-term life support, as life just keeps ebbing away, and costs the taxpayer billions.
Yes, we could have a sustainable local car manufacturing industry. Yes, it would have to be backed by taxpayer money. But first it has to be rational.”
By all means, we should preserve our investment in Australian manufacturing capability and the car industry is an important part of that investment. But please don’t think constant handouts to decrepit old US “too-big-to-fail” behemoths is the best way to do it.
The world is changing rapidly and the old GM/Ford thing has missed the boat and is falling away. If every one of the 60,000 or so jobs in the Australian auto industry is being subsidised to the tune of $300k per annum or so, then that’s a great pot of money to invest in some real future-proofing of our manufacturing ability.
Why aren’t we designing and producing electric cars, hybrids, investing aggressively in software and robotics in order to address the high labour costs; innovating and taking a lead with exports in mind?
Let’s use the fact that our dollar is current high to bring in cheap import cars while we rebuild our own industry – one not based on token amounts of expensive local content from large overseas companies. The US car makers have proven that they can’t handle change and adapt in time. Meanwhile, our cars have become ugly, bloated, guzzling 4WD SUVs – a stupid but predictable trend given the continuing influence of those tired old US auto makers.
It is not the high Australian Dollar, its the Carbon Tax. The Japanese are just being polite, so as to not rub Gillards nose in it.
The $A is $US1.04. In the last decade, its average is around $US0.945.
A less than 10c differential is nothing.
Its the Carbon Tax.
So many manufacturers are looking or preparing to move overseas, where we have FTA’s.
Hey, if American taxpayers want to subsidise my car, why shouldn’t we let them? I’m more than happy to take money from American taxpayers. Of course, they’ll go bankrupt if they keep doing that but that’s “their problem”.
SB
As usual your figure is wrong but why break the pattern as facts and figures aren,t your thing . A carbon price that doesn,t come in till mid year has , according to you , affected car sales . I can recall the aussie dollar around the 60 cents mark and even lower with the average around the mid seventies for quite some time . What source did you use to get the figure of 94 cents over the last decade which would have to 2001 to 2011 to be accurate but more likely 2000 to 2010 .
The car industry in Australia has undergone many changes over the years with many folding such as chrysler and leyland . Its an industry worth retaining with the question being how far we go to retain it. For all the talk about aussie pride and flag waving its aussies who have sold our national iconic products to overseas interests . Over 80% of our food is manufactured by overseas firms and its almost impossible to find a genuine aussie made and owned product on the shelves of a supermarket . Try it one day and you will be amazed at how little there is available . Last I saw we are 6 billion worse of with our crummy deal with the USA on free trade , good job Vaile and Howard . Seems the FTAs are a reincarnation of the MUAs that everyone voiced concern about and were put aside or so it seemed .
Ive changed my mind slightly on the presence of a foreign flag on our own because we are still basically a colony to serve foreign interests . I wear a T shirt with the Eureka flag on it which is as close as I get to display pride in Australia and being Australian . Its totally Australian to serve new arrivals who were struggling to get on and resisting colonial and authoritarian extortion . I,m balding now so no forelock to tug even if inclined to do so but the likes of Howard etc up to Gillard are always at the ready . Abbott would sell his ar se for a knighthood and residence at Kirrabilli , no lodge for him thank you . Stick your avatar SB because it means little more than continued subservience and wasn,t officially proclaimed our national flag till 1953/54 so don,t bullsh it about WW11 troops dying for it. No Korea or either world wars that so called patriots like you wrongly state . Can,t even get that right but as I say why break the pattern . Patriotism the last refuge of the coward or something like that is the quote that comes to mind.
@ Geomac
.x-convert.com/chart/AUD-USD?period=10y
The companies are preparing for the carbon tax. Why make cars here with the world most expensive carbon tax. 14 times the rate China may deploy in 2015, 23 times the rate in India.