50,000 Workers in Supporting Industries to Lose Jobs With Closure of Toyota Australia’s Camry Factory in 2017
By Vittorio Hernandez | February 11, 2014 8:26 AM EST
Toyota hopes strong sales of the Camry can help it rebound from a 2011 drastically affected by natural disasters.
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Australia's car manufacturing would die by 2017, while about 50,000 workers from the supporting industry would become jobless. That would be on top of 2,500 Toyota employees also joining the ranks of the unemployed in less than four years from now.
Max Yasuda, the CEO at Toyota Australia, said he was devastated by the development and blamed the pending closure to low tariffs, new Free Trade Agreements, the strong Australian currency and high labour cost.
However, Australian economists disagree with the carmakers blaming the Aussie dollar on their ill fortune.
Paul Bloxham, chief economist for Australia of HSBC, said, quoted by The Age, "The larger part of the story is not to do with the currency, but rather to do with globalisation, and Australia not competing in terms of low-cost manufacturing."
He said even if the Australian dollar were weaker, the various pressures coming from lack of productivity and competitiveness in many parts of the national economy would remain.
Despite a Federal Court victory by Toyota unions in late 2013 to stop a vote on proposed changes to worker conditions, Mr Yasuda returned from Japan with no deal signed and came home with the bad news that the facility would have to shutter.
"This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years," The Herald Sun quoted Mr Yasuda.
The bad news was delivered by Akio Toyoda, global boss of Toyota, on Monday afternoon. He arrived on Sunday night in Australia and met the workers to deliver the message personally in between the close of the morning shift and opening of the evening shift.
Even if Toyota was infused with $1.2 billion taxpayers' money the past decade, the company nevertheless lost about $1.5 billion for the same period. In the past four years, Toyota got up to $492 million in government grants under the Automotive Transformation Scheme designed to assist carmakers become economically sustainable.
The news of Toyota's closure by 2017 prompted Victorian Premier Denis Napthine and Deputy Premier Peter Ryan to seek support from the federal government when he meets Prime Minister Tony Abbott on Tuesday to seek a package that would include workers in the supply chain.
Australians who want to buy a Camry beginning 2017 would rely on vehicle imports from seven other factories that still make that particular model. Ironically, Toyota Australia builds about 100,000 vehicles yearly and exports about 70 per cent of their production overseas.
"We did everything that we could to transform our business, but the reality is that there are too many factors beyond out control that make in unviable to build cars in Australia," The Australian quoted Mr Yasuda.
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