View from The Hill

View from The Hill

End of iconic industry part of a bigger Australian story

Toyota’s exit signals the end of automotive manufacturing in Australia. Joe Castro/AAP

If there was ever a symbol of the trauma industry restructuring brings - to the national psyche as well as affected workers - the impending death of Australian car manufacturing is it.

“This decision will change the face of industry in Australia forever,” industry minister Ian Macfarlane said after Toyota’s announcement that 2017 will see the end of its local production.

When Holden said it would pull up stumps, Toyota was widely expected to follow. Labor critics have attacked the government for not trying to prop up the auto industry, but even if the ALP had still been in power and inclined to do that, it almost certainly would have been only a matter of time.

Ford announced its planned shutdown in the Gillard days. The evidence around the GM decision indicated that extra aid would not have changed the Holden story.

Toyota Motor Corporation president Akio Toyoda said in Monday’s announcement: “We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort. However, various negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision.”

It had became a domino effect.

Significantly, even opposition leader Bill Shorten has conceded that Labor might not have been able to hold back the tide in the longer run.

Criticising the government’s failure to act, he told the ABC’s 7.30: “We would’ve worked on a transition which would’ve seen this bad news avoided. And even if it wasn’t possible in the long term to avoid it, there’s a big difference between Labor and Liberal. We won’t stop fighting for people’s jobs until we’ve turned over every rock and we’ve tried every trick.”

The auto industry has had an iconic status, and obvious importance for the nation’s skills base. The textile, clothing and footwear industries weren’t in the same league. Nevertheless, when dramatic structural change downgraded (though didn’t close) that sector, there was deep concern and many businesses and workers were hurt. But looking back, most people would believe there was little choice, and certainly consumers were better off.

The global economy really does mean that countries have to play to their strengths, and that can become harder if the mindset is on trying at all costs to prevent the weak spots collapsing. (One wonders whether there was a lively debate about the fate of the coach building industry when the horseless carriages displaced it.)

At the level of individual workers, the consequences of the structural changes range from merely disruptive to absolutely catastrophic. Some, especially older, autoworkers will never get other jobs. Others will move to new careers, but the state of the economy and opportunities for retraining will be crucial in how readily they will be able to do this.

In Monday’s Australian Financial Review (before the Toyota announcement), Liberal pollster Mark Textor had an interesting take on Australians’ dual attitude to restructuring.

“More than a decade ago I reported to a national industry group that Australians believed that a two-pronged approach was required for Australia to survive and/or thrive in a global economy,” he recounted.

“On the one hand they sought an offensive strategy, ensuring that the investment in and development of ‘clever’ industries was accelerated as much as possible to ensure that Australia was not left behind in a race with the rest of the world.

"On the other hand they sought a defensive strategy to ensure that any restructuring (or destruction) within traditional industries and to traditional work practices was as slow and as painless as possible, and as ordered and structured as possible.”

All Australians had now largely embraced the opportunities created by the emergence of the global economy, Textor said. “However, the distress surrounding the collapse or imminent closures of Ford’s, Holden’s and SPC’s Australian operations demonstrates that despite the number of jobs lost being dwarfed by those created by industries such as gas, voters still display insecurity about any reduction in control over our own economic destiny.”

Even if it is accepted that Australian auto manufacturing did not have a long term future, no government would welcome the funeral notice being placed on its watch.

This adds to the cross-pressures on the Abbott government, which is faced simultaneously with an uncertain economic outlook and a long list of recommended cuts from the Audit Commission. And all against the background of its bold promise, already looking shaky, to create one million jobs over five years.

Listen to the newest Politics with Michelle Grattan podcast with Chief Scientist Ian Chubb here.