Within the next four years not a single new car will roll off of an Australian assembly line. That fact was confirmed this week when Toyota announced that it would join General Motors and the Ford Motor Company in beating their collective manufacturing feet from the land down under.
Production Shut Down Dates
Toyota’s exit will cost the country 2,500 direct jobs and many thousands more in supplier and local labor. The Japanese automaker says that it will quit manufacturing in Australia in 2017 as will GM. Ford says that it will shut down production in 2016. All three comprise Australia’s entire automotive manufacturing industry.
And all three manufacturers blame the high cost of manufacturing and the strong Australian dollar for exiting reports The Australian. Toyota has been manufacturing vehicles in Australia since 1963 in Altona, a suburb west of Melbourne, Victoria.
At its Altona plant, Toyota currently produces the Camry and Camry Hybrid for Australia and New Zealand. A third model, the Aurion, is produced and sold locally and is also shipped abroad to several Asian markets. Besides the three models, four cylinder engine production will be affected too.
Toyota Australia News Conference
On hand to announce Toyotas plans were Toyota Australia President and CEO, Max Yasuda, and Toyota Motor Corporation President and CEO, Akio Toyoda. Said Yasuda, This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years. Yasuda added that the automaker had done everything it could do over the past two years to transform its business, but factors beyond the company’s control made it unviable to build cars in Australia.
While Toyota will cease being an Australian manufacturing concern by the end of 2017, the company says that it will become a national sales and distribution company. Toyota products will still be sold, but its entire product line will be imported from abroad. The executives promised to study over the coming months how its corporate divisions will operate as the changes are made.
Yasuda promised to stay the course as the company winds down Australian manufacturing. Not only do we need to ensure our local suppliers and employees can plan for their future, we also need to make sure that we continue to produce high quality vehicles and engines for our domestic and export customers, said Yasuda.
Australian Domestic Production
The Australian market has long designed and produced its own models including a handful familiar to American consumers. Both the defunct Pontiac G8 and the current Chevrolet SS are based on GM (Holden) products, the latter on the current Holden Commodore. Both Ford and GM produce models that are unique to Australia including some that are exported abroad. Neither company has said whether production of affected models will be shipped abroad or if those models will be canceled.
Australian automotive production peaked in 1970 at about 450,000 units per year. Unlike the US auto industry that has largely recovered from the recession, Australian production remains off by more than 35 percent from 2008s 324,118 units produced according to the Federal Chamber of Automotive Industries. Production fell by 5 percent in 2013 against 2012, to just 210,538 units.
Criticism From Labor
The Australian Council of Trade Unions (ACTU) criticized the country’s prime minister, Tony Abbott, for not standing up for local jobs. ACTS Secretary Dave Oliver commented, The Abbott Government goaded Holden into leaving, they’ve done absolutely nothing to keep Toyota in this country and as a result Australia will lose up to 50,000 direct skilled jobs, $21 billion will be wiped from the economy and regions will go into recession. Oliver said the loss of manufacturing jobs “…will have far reaching consequences around the country and throughout the economy.”