Wed, Oct 04, 2017 - Page 10 News List

Toyota closure latest step in Australia’s ‘Carmageddon’


Workers yesterday walk outside the Toyota manufacturing plant in Melbourne, Australia, where the last Toyota Camry rolled off the production line yesterday.

Photo: EPA-EFE

After looming for four years, “Carmageddon” has hit the Australian auto industry. Toyota Motor Corp yesterday closed its factory in Melbourne, ending 54 years of production by the Japanese firm in Australia, the first country outside of Japan where the company made cars.

Iconic local brand Holden plans to shutter its factory in Adelaide on Oct. 20, ending car manufacturing in Australia.

Ford Motor Co, which pioneered Australian-based auto making in 1925, heralded its end in 2013 by announcing it would close its last two Australian manufacturing plants in 2016.

General Motors-owned Holden followed suit several months later by announcing it, too, would close down. With the loss of those two firms making the supply of locally-produced auto components unsustainable, Toyota reluctantly soon followed.

Toyota has been Australia’s biggest auto manufacturer for the past decade, with 70 percent of its cars exported, mostly to the Middle East. Output at the Melbourne plant peaked in 2007, when it made 149,000 cars.

When the final Camry sedan rolled off the Melbourne production line, 2,700 Toyota workers became unemployed.

“It’s sunk in now. I couldn’t sleep last night,” Michael Spiteri, who worked at the plant for 23 years, told Fairfax media.

The closure of the Holden plant will eliminate 3,000 jobs. Industry analysts forecast the loss of thousands more jobs in auto-related industries.

Research by the University of Adelaide has predicted a worst-case scenario of 200,000 lost jobs nationwide due to the auto industry’s collapse, which would take A$29 billion (US$22.6 billion) out of Australia’s GDP annually.

John Spoehr, a professor at the university who co-authored the report, said the plant closings and resulting loss of supply chains will have a wide impact.

“We haven’t seen in recent history the collapse of an entire industry, but that’s what is happening,” Spoehr told The Associated Press.

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,” 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.”

However, Australian Prime Minister Malcolm Turnbull said changing tastes were the main factor leading car manufacturers to close 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.”

When Toyota announced it would close the Melbourne plant, it blamed the “unfavorable Australian dollar,” high manufacturing costs and meager economies of scale in Australia.

While Australia’s resource sector remains strong, manufacturing has suffered.

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 48 percent in the past decade while productivity fell while car output dropped by nearly half from about 400,000 cars in 2004, it says.

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