The shutdown of Ford Australia is imminent, with the last car to role off the Broadmeadows production line at the end of next week, with the loss of thousands more manufacturing jobs.
With this deadline looming, ABC’s The Business aired an interesting segment last night looking at the End of the road for car making and what the future holds:
The report notes that up to 7,000 manufacturing jobs will disappear. But there will be some offsets.
Ford’s Broadmeadows headquarters is currently under reconstruction and will hold a design and virtual reality centre.
The Geelong engine plant will have R&D and testing facilities.
All up, this means that Ford will retain some 1,500 employees.
Holden, by contrast, will keep its vehicle design team in Melbourne and will employ more than 400 engineers, designers and technical training staff.
Toyota will keep its vehicle evaluation, engineer and training facilities, but will employ just 130 staff.
But it’s the flow on effects to the supply chain that will have the biggest impacts on employment. The reports quotes Productivity Commission estimates that up to 40,000 jobs could be lost in the automotive supply chain, albeit over several years.
While not mentioned in the report, modelling by Allen Consulting Group, which used economic analysis from Monash University, estimated that the car industry’s closure would cost around 33,000 jobs in Melbourne and around 6,600 jobs in Adelaide by 2018.
Whereas on the uber-pessimistic side, University of Adelaide researchers, Lance Worrall and John Spoehr, estimated that the car industry’s closure could cost up to 200,000 jobs once employment multipliers are added into the mix.
Regardless, the impact of the car industry’s closure will be large and represent a big hit to the economy, particularly in South Australia and Victoria. Manufacturing remains an important source of full-time jobs in both states, accounting for around 11% of total full-time employment in Victoria and 12% in South Australia.
It will also leave a big dint in Australia’s balance of payments, with Australia’s automotive industry becoming 100% consumers, not producers, from end-2017, meaning that all our cars will need to be funded by other exports or external borrowings.
The timing of the car industry’s closure is also poor, since these job losses are set to coincide with the cratering of mining investment and the expected downturn in dwelling construction.
