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Oz crisis: 50 000 jobs to be axed?

2014-02-11 15:09
Ford, Mitsubishi, Holden and now Toyota... Australia could be facing an economic crisis  the likes of which 'haven't seen since the Great Depression' as unions fear 50 000 jobs could be lost. Australian prime minister Tony Abbott in responds.

SYDNEY, Australia - Australian prime minister Tony Abbott said there was nothing he could do to prevent Toyota halting vehicle manufacturing in Australia, as fears it will spark an economic crisis gather pace.

Toyota said it would stop making cars in Australia by 2017, citing high production costs, a strong local Dollar and a small domestic market. The decision would end the country's 66-year-old auto manufacturing industry.

Whereas Toyota SA recently announced a R1-billion injection for production here of the new Toyota Corolla.


Toyota’s announcement follows Mitsubishi closing factories in 2009, Ford halting production in 2016 and General Motors announcing in December 2012 that its Holden brand would also cease manufacturing by 2017.

The demise of the industry has sparked a political battle with the Labour opposition blaming the government for not doing enough to prevent Toyota from walking away and unions warning 50 000 jobs could be lost down the supply chain, mostly in component manufacturing and transport.

Given that the numerous strikes in 2013 cost the country millions and BMW lost its local 3 Series production contract, the current state of the Australian auto industry should serve as a rude awaken for the SA auto industry.


Opposition industry spokesman Kim Carr compared the impact on the worst-hit states of Victoria and South Australia to the Great Depression which struck the nation in the 1930s.

Carr said: "There's likely to be, for many blue collar Australians, an economic crisis the like of which we haven't seen since the Great Depression.

"There are going to be families that won't be able to get work. There will be whole communities that will be savaged by this decision."

Since coming to power in 2013, the conservative government has adopted a hard line on industry assistance, warning earlier in February 2014 that "the age of entitlement is over" when it comes to taxpayer-funded handouts.


Abbott said that millions of dollars had been thrown at the ailing car industry in recent years and had not saved it.

Abbott said: "This is a very considered decision (by Toyota) and it is a final decision and it's not as if the government could have leapt in at the 11th hour and said here's another $100 million or $200 million, please, please, please stay."

"We've tried that with the motor industry. It hasn't worked and the best thing now is to focus on things that we can do and which are profitable."

Victoria state Premier Denis Napthine met workers at Toyota's Altona plant in Melbourne and said "there was a sense of disappointment, but also a sense of where do we go from here".

He was due to meet Abbott later in Canberra to thrash out a package to assist retrenched workers in the state as well as drum up more money for key infrastructure and industries of the future to help their transition.

Toyota has manufactured cars in Australia since 1963 and still produces the top-selling Camry sedan and other models in the country. But not for much longer...

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