The face of the car manufacturing industry is forever changing. This was made clear after Toyota announced that it will be pulling out of Australia. Unfortunately, Toyota represented the last car manufacturer in Australia to have a working plant. Once Toyota pulls out, there will effectively be no cars being produced in Australia. It is unclear how this will affect car disruption over the rest of the world.
This announcement from Toyota comes despite Prime Minister Tony Abbott appealing the decision. Abbott wants the automaker to stay in Australia and keep its plant open. The real reason why he wants Toyota to continue to manufacture cars in Australia is because more than 3,900 Australians will be without jobs once this last plant shuts down.
Currently, Toyota employs just over 4,000 people in Australia. Just over 3,900 work at its Altona plant in Melbourne. Another 150 people work at a design centre located elsewhere. Despite this, Toyota says that it will be completely done with vehicle and engine production in Australia at the end of 2017.
The closing of this plant marks the end of more than 66 years of car building in Australia. This industry used to supply more than 50,000 Australians with jobs. The car industry was huge in Australia and sent cars all over the world. Now, this once bustling industry is dead.
Just like other manufacturers, Toyota has blamed a number of factors for this choice. It said that the strength of the Australian dollar is one of the biggest factors. Paying workers in Australia costs more than paying workers elsewhere because the Australian dollar is so strong. Also, building cars in Australia suffers from the same problem. It is simply cheaper to build cars in other countries around the world.
Although Toyota is the most recent car manufacturer to stop producing cars in Australia, there have been a number of other plants that have closed down over the years. For example, five years ago Mitsubishi closed its Adelaide plant. Ford says that it will stop producing cars in Australia starting in 2016, which will see another 1,200 people lose their jobs. Until Monday, Toyota would have been the only manufacturer left after 2016. Now it will only hold that role for one year until the end of 2017.
The Australian Manufacturing Workers’ Union is really upset with this move. It said that the closing of so many plants in Australia is likely to trigger a recession. The economy in Australia has already been traveling down a bumpy road as it tries to steer away from a reliance on mining. The car industry was helping this happen. Now, even more people will be without jobs, and an already packed unemployment market is about to become flooded.
Unfortunately, this has been a long time coming for Australia. Car manufacturers have been pulling out for years, so many experts saw this coming. However, there has been little that Australia has been able to do to stop it. The country simply cannot compete with how cheap it is to build cars in other markets.