- Herald Sun
- February 11, 2014
THE death of Australian car making will have severe consequences for the wider economy and leaves Victoria at a perilous crossroads, business leaders say.
And Toyota’s decision to abandon the market extends an alarming “chasm” that threatens even larger swathes of industry, they say.
The Japanese giant has dealt the final blow to Australia’s once mighty car-making sector, announcing it will join Holden and Ford in pulling out in coming years. Toyota will cease production in 2017.
Toyota Australia chief Max Yasuda said it was simply “not viable” to continue building cars here. The high Australian dollar — which soared during the mining investment boom before losing steam in recent months — was a major culprit.
But the high costs of manufacturing in Australia was also a problem, the company said, coupled with “low economies of scale” for the group and the local supplier base.
Peak business lobby groups called for the government to provide transition assistance for the components sector and to help affected workers.
They said the problems created by the Holden and Ford exits were now “magnified”.
“Today’s announcement by Toyota that it will cease vehicle production in 2017 is a sad but inevitable consequence of being the last major automaker in the country,” Australian Industry Group chief Innes Willox said.
He said government needed to help “address the chasm” that had opened across Australia’s broader industry.
“The automotive assembly companies have long held key roles in the development and diffusion of technological, process and design-led innovation in Australia,’’ Mr Willox said.
“(They) have been pivotal in the training of skilled workers and managers who have taken this expertise and applied it across the economy but particularly in the industrial sector.’’
Victorian Employers’ Chamber of Commerce and Industry chief economist Steven Wojtkiw said the blow would initially “fall hardest” on the workforce in the car making sector, but governments needed to prepare for the economic flow-on.
“The timing of the announcement is a surprise and a blow for Victoria,’’ Mr Wojtkiw said. “The challenge for policy makers is to soften the blow with actions that help transition displaced workers and affected industries and regions.’’
Mr Wojtkiw said the automaker closures also served as a warning for politicians to “get ahead of the curve” of the constantly changing economy.
“This is a stark warning to continue to have regard for critical importance of a highly skilled productive workforce.’’