Recession Feared With Death of Australia's Car Industry; Unemployment Rate Climbs to 10-Year High
By Reissa Su | February 14, 2014 1:26 PM EST
In May 2013, Ford Motors said it would stop manufacturing cars in Australia. In December, Holden by General Motors followed suit. Toyota has sealed the fate of Australia's car industry by closing its assembly plants by the end of 2017. The last announcement has triggered fears of recession in Australia.
In a statement, Toyota said it was "heartbreaking" for the company to stop making cars in the southern state of Victoria, but the company blamed the strong Australian dollar for the increasing costs and weak international competitiveness. As a result, the company's profits were slowly eaten away.
Some 2,500 Australians will lose their jobs soon, but the final blow to the local car industry will have a bigger impact to the economy. The threat of large-scale unemployment is looming even in the automotive component supply sector.
According to trade unions, Toyota's decision to pull out will leave 50,000 Australians without jobs and take away AU$21 billion from the economy. However, economists fear that the death of Australia's car industry could wipe out 200,000 jobs including "downstream" sectors like logistics, transport and other business sectors. Academics believe these sectors will need to adapt or face eventual decline.
The associate professor and executive director of the Australian Workplace, Innovation and Social Research Centre at the University of Adelaide, John Spoehr, said Australia is beginning to experience some of the worst economic conditions faced by the UK and some parts of Europe.
Professor Spoehr warned the withdrawal of Toyota could leave Victoria and South Australia on the brink of recession. He told BBC that the death of the car industry in Australia will dislocate a great number of people.
Opposition Leader Bill Shorten has criticised Prime Minister Tony Abbott and said he will be remembered for the death of Australia's car industry. Mr Shorten called the Coalition government as a "job-killing government."
Mr Abbott defended himself and argued that he can't be blamed for the death of an industry already in decline years before.
Meanwhile, Australia's unemployment rate has climbed to 6 per cent - a record-high in 10 years. According to the Bureau of Statistics, 3,700 Australians lost their jobs in January which pushed the unemployment rate up to 6 per cent. The last time Australia had the same rate was in July 2003.
To contact the editor, e-mail:
Most Popular Slideshows
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- Chris Martin Dating Reports: Jennifer Lawrence Vs Gwyneth Paltrow [PHOTOS]
- 2014 MTV Video Music Awards: Everything To Know [PHOTOS]
- British Style Icon Kate Middleton Fashion Talk With Camilla Parker-Bowles Daughter-In-Law [PHOTOS]
Join the Conversation
- Muslim Leaders Refuse to Approve Tony Abbott’s Terrorism Law
- Russia Demands Ukraine Release Communications With Doomed Malaysia Airlines MH17, Preliminary Report On Investigations Out This Month
- Ebola Update: Liberian Forces Receive Shoot Orders Against People Trying to Cross from Sierra Leone Border
- Historic First Time: Catholic Pontiff Pope Francis Supports Military Intervention Against ISIS In Iraq
- Chinese Airlines Receives Lawsuit for Rejecting HIV-Positive Passengers
- 4.7-Inch, 5.5-Inch iPhone 6 Models Confirmed with Similar Build, Cam Features & 300+ Screen Pixels on Release Date
- Saudi Arabia: Brothers Beheaded For Smuggling Marijuana Into The Kingdom
- ISIS: More Journalists Beheading To Come After James Foley and Steven Sotloff [Video]
- Moto X+1 is Likely Nexus 6 Template; Motorola Shamu is 1st Android Silver with Snapdragon 810 – Reports
- James Foley: More Chilling Information Revealed By Escaped Journalists
- James Foley’s Executioner Has British Accent—A Chilling Reminder That ISIS Has Foreign Members
- Xiaomi Mi4 vs iPhone 6: Why Forecasts Favor Mi4 as The Next Best Phone Against iPhone 6