Toyota to shut local production

Toyota workers leave the factory after being told their jobs will be lost in 2017. Picture: FAIRFAX
Toyota workers leave the factory after being told their jobs will be lost in 2017. Picture: FAIRFAX

The end of car manufacturing in Australia — confirmed with Toyota’s announcement it would shut production in 2017, taking thousands of jobs with it — could tip Victoria and South Australia into recession, industry experts and economists have warned.

The automotive giant’s global boss, Akio Toyoda, travelled to the Altona plant and told 2500 workers their jobs would go in three years.

The decision is a massive blow for the Victorian economy in particular, where more than 25,000 jobs are likely to go across the car and automotive components industries.

Unions claim 50,000 skilled jobs may be lost nationally.

Toyota will follow Ford and Holden out of the country, with all three car makers announcing in the last year they would cease manufacturing by 2017.

And the Australian parts supply industry warned the announcement could see the sector collapse before 2017 unless the Abbott government intervened.

“It is one of the saddest days in Toyota’s history,” the car maker’s Australian head, Max Yasuda, said yesterday, after telling workers the company would soon cease production of its Camry, Aurion and other models in 2017.

The company had done all it could to keep making cars in Australia, he said.

The Australian dollar, the high cost of production, free trade agreements and the country’s fragmented auto markets were the reasons for the decision, he said.

Prime Minister Tony Abbott said nothing the government said or did would “limit the devastation that so many people will feel at this point”.

“While some businesses close, other businesses open, while some jobs end, other jobs start,” he said.

Premier Denis Napthine will today fly to Canberra to meet Mr Abbott to discuss the need for a package for workers and those affected by Toyota’s closure.

Dr Napthine said he was disappointed by “the suddenness” of Toyota’s decision.

He said he had been told by Mr Toyoda there was nothing the Victorian government could do to change its mind.

Federal Opposition Leader Bill Shorten blamed Toyota’s demise on the government.

“It’s an unmitigated disaster,” he said. “The car industry has died under the Abbott government. It’s a disgrace.”

Mr Shorten said Mr Abbott did “not give a stuff about jobs in Australia — he is just busy playing political games and stunts”.

Industry Minister Ian MacFarlane said Toyota’s decision had changed the face of manufacturing in Australia.

He said Toyota had made no requests for financial assistance to the federal government, but had expressed frustration at the company’s inability to make changes to its workplace agreement with employees in a bid to save about $3500 per vehicle.

University of Adelaide economics and workplace expert John Spoehr warned the closure of all three car makers in Australia could pull Victoria and South Australia into recession.

“This is the collapse of an entire industry, not just Ford, Toyota and General Motors Holden,” Professor Spoehr said.

“Those companies are the tip of the automotive industry — underneath them is a massive components industry and thousands of other suppliers” such as transport, business services and advertising. It starts to amount to thousands and thousands of jobs.

“With Holden alone we were looking at 50,000 jobs ... (now) you are looking at hundreds of thousands.”