From the ABC yesterday evening:
Holden will close its Adelaide plant in less than three weeks, on October 20, placing 944 people out of work.
But the biggest workforce hit will occur tomorrow — when Toyota shuts down its manufacturing facilities in Altona, which will make 2,500 workers redundant.
Since shutting down its Australian operations last year, Ford and the Government have spent millions on retraining workers. But only about half them have been able to find new jobs.
Former employees from those car factories face insecure employment, the Australian Metals Workers Union (AMWU) said.
“A great majority of them are finding casual work that may lead to full time work but obviously at extremely lower pay and conditions,” said Paul Difelice of the AMWU’s vehicle division…
Victoria’s Minister for Training and Skills, Gayle Tierney, expects the Toyota shutdown will be a bigger hit to the economy compared to the Ford closure.
This is partly because the newly retrenched workers will be competing with former Ford workers who still looking for jobs.
“There are going to be hundreds and thousands of people looking for jobs and coming onto the labour market at the same time,” Ms Tierney said…
The promises of new and better jobs have not been delivered, the AMWU’s Mr Difelice said.
“Federal politicians said it will be OK because the job losses in the car industry would be replaced by better and more highly skilled jobs,” he said
“They just haven’t eventuated, it’s as simple as that.”
As I noted last month, the official Department of Employment projection is for the closure of the car industry to cost some 27,500 manufacturing jobs over the five years to November 2020:
However, Valadkhani and Smyth (2016, Table II, p.698-701) also estimated that beyond the direct impact on manufacturers and parts suppliers, there will be a significant impact on output and tens of thousands of job losses in downstream and upstream industries, in particular the Professional, Scientific and Technical Services (PSTS) sector (see below chart).
It will also leave a big dint in Australia’s balance of payments, with Australia’s automotive industry becoming 100% consumers, not producers, meaning that all our cars will need to be funded by other exports or external borrowings. As noted at The Glass Pyramid:
Next year Australians will buy close to 1,200,000 vehicles at a cost of approx $40B (assuming each car costs approx $30,000) and they will all be imported from our trade rivals like France, Germany, England, USA, Italy, Sweden, Japan, Thailand, Korea, China, Russia, Austria and all those other countries that reckon maintaining heavy industry and manufacturing skills is a very good idea…
Perhaps Mr Pyne could drop by with a shovel for a formal burying of the Australian car industry ceremony. Invite Joe Hockey to fly in from Washington so he can tell us about the “hard yards” he is doing at taxpayer expense on the Washington cocktail circuit and then explain how shutting down Australian car manufacturing was his proud legacy as a Liberal Party Treasurer.
Don’t forget Barnaby Joyce, as the Kiwi secret agent is always good at explaining why failure is in the national interest.
It is worth keeping in mind that it was only a few years ago that we were exporting cars and components across the world including to places like Thailand…
We can always debate whether positive protection of specific industries is warranted and, if so, how much protection and for how long – the debates that our trade rivals never seem to have as they continue to protect THEIR key industries – but what should be beyond debate is that it is stupidity of the highest order to effectively impose a tariff on your industries, businesses and workers by inflating your exchange rate with unproductive capital inflows to drive a bubble in household debt and residential asset prices.
Earlier this year, two automotive component makers announced they would close after Toyota and Holden, resulting in 350 and 250 job losses respectively. Surely this is merely the tip of the iceberg.
