Toyota Shuttering Australian Factory By 2017, Local Industry Dead

TTAC Staff
by TTAC Staff

Toyota announced Monday that as of 2017, the automaker will no longer manufacture any of their vehicles in Australia, driving in the final nail to the coffin containing the nation’s local automotive industry following similar announcements by Holden and Ford.

Toyota Australia head Max Yasuda and Toyota Motor Corporation head Akio Toyoda made the announcement at the automaker’s factory in Altona — a suburb of Melbourne — before an audience comprised of various media and the factory’s 4,200 employees. Yasuda claimed numerous factors in the decision, citing high costs of manufacturing, low economies of scale, increased competitiveness surrounding current and future free trade agreements, and the “unfavourable” Australian dollar as among the many reasons for the closures.

“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia,” Yasuda said. “Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.”

The Australian Manufacturing Workers Union warned that Toyota’s complete exit from the nation’s manufacturing base would devastate not only those directly affected, but up and down the supply chain, as well. AMWU vehicle secretary Dave Smith added that the final result would be “a potential recession all along the south-eastern seaboard.” The Australian Council of Trade Unions also warned that the pullout would ultimately cost 50,000 jobs and erase $18.76 billion from the local economy.

On the government side, Industry Minister Ian Macfarlane said he was disappointed in the decision, and felt that the government would have been able to help had there been enough time to put a plan in place to keep Toyota manufacturing in Australia. Victoria Premier Denis Napthine concurred with Macfarlane’s sentiment and desire to have been able to work through the issue, and would be seeking a commitment from Australia’s coalition government — currently led by Prime Minister Tony Abbott — for a comprehensive adjustment package similar to the one made to Holden employees late last year.

On the subject of government subsidies, Abbott said his government had wanted Toyota to soldier onward, going as far to hold private talks with Yasuda as recently as hours before the announcement of the manufacturing pullout — contradicting what Abbott said in an earlier press conference regarding knowledge of the announcement — though as with Holden prior to its decision, paying the automaker any extra taxpayer dollars was ruled out.

Abbott said that while nothing could be said or done to “limit the devastation that so many people will feel” from the fallout of Toyota’s decision, he wanted everyone to remember that “while some businesses close, other businesses open, while some jobs end, other jobs start,” and that there would be “better days in the future.”

Opposition Leader Bill Shorten, proclaiming the Toyota closure an “unmitigated disaster,” offered this statement on the matter:

The car industry has died under the Abbott government — it’s a disgrace.

TTAC Staff
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  • Jeff S Jeff S on Feb 11, 2014

    @Robert Ryan--I agree there will eventually be one remaining domestically based auto maker in the US, Ford. I think GM could eventually become either a Chinese Corporation or acquired by another auto maker. Chrysler is already part of Fiat. I do see more globally designed vehicles. It is sad that Australia is losing domestic vehicle manufacturing along with their uniquely designed vehicles, but I agree with Big Al that to continually subsidize an industry just to keep it is not viable. On a smaller scale many cities subsidize major department stores to stay in downtown areas. Cincinnati has been doing that for years with Macy's and Saks Fifth Avenue. Saks has decided to pull out of downtown and move to the suburbs by 2016 regardless of what the city offers. Over the long run subsidies will not keep businesses or industries from moving.

    • Big Al from Oz Big Al from Oz on Feb 12, 2014

      @Jeff S I stated your exact sentiments quite some time ago. I remember reading an interesting article about how GM approached Ford at the onset of the GFC asking Ford if they were interested in forming on manufacturing entity. Apparently Ford did have some interest, until GM stated they should control the business because they had the larger market share. Ford, apparently stated more or less, 'if you are that big, why do you come to us for help?' It never occurred. I mentioned a while ago about the rationalisation of the auto industry and it eventually becoming a 12 or so manufacturers globally. The country I would discount in this is China, as their auto industry is still in it's infancy. I do see Fiat becoming stronger.

  • Big Al from Oz Big Al from Oz on Feb 11, 2014

    @RobertRyan I wonder if we will end up with these ;) These will offer better job opportunities than working on a Camry. I know. We don't need an auto industry for this stuff. Who will work with the composites? Australia is a world leader in composite technology.

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