Bosch closes Australian auto test centre

ROBERT Bosch has closed its Australian automotive test centre and sent its state-of-the-art facilities offshore after failing to win enough new business from local and regional car companies.

Although the global economic downturn earlier this year forced Bosch to cut 12 per cent of its Australian workforce – equating to around 170 jobs – the leading automotive supplier this week told GoAuto that the test centre’s closure was not directly related.

Robert Bosch (Australia) corporate business manager Alex Haberle said the closure of Mitsubishi’s Australian car manufacturing operations in 2008 – for whom Bosch did a significant amount of engine development work – had left the test centre underutilised.

GoAuto understands that the centre had smaller programs in place with other manufacturers, including base calibration on V6 engines for Holden, engine correlation work with Ford Australia and engine and chassis testing for a number of overseas car companies.

Left: Bosch Group chairman Franz Fehrenbach.

However, these smaller programs were deemed insufficient for the automotive test centre (ATC) to remain viable.

“It dropped back majorly with Mitsubishi’s closure,” Mr Haberle said. “The volume could not be, I guess, satisfied given that closure.

“(Work from other local car-makers) wasn’t that much out of the total volume.

“Between that time of losing that major business, we were unable to convert further projects to fill the capacity.

“The team here in Australia had been active in trying to find projects through local or regional acquisitions, mainly in the Korean, Malaysian and Thailand market.

“But after several years of not being able to convert those into Australian projects, we’ve had to close the test centre.

“The ATC (closure) – I would have to say would be something outside of the GFC. Like I said, it was more to do with a customer-volume reduction. And that was more to do with ... the closure of Mitsubishi.”

Mr Haberle said test centre equipment and services had been relocated to other Bosch locations around the world, with India believed to be the main recipient.

Bosch launched a new ‘reliability testing centre’ in India in August, although Mr Haberle was unable to confirm whether it was stocked with equipment from the Australian centre.

“It’s not a one-to-one (Australia-to-India) relocation. There are a few other automotive test centres that required new equipment, and it is just really (a case of) filling up their volume,” he said.

“There are many automotive test centres in the Bosch world. There was a capacity issue in these locations, and we had a very low-level capacity usage of that equipment here in Australia and our business decided that it should be relocated.”

GoAuto understands that the automotive test centre had up to 20 people working on programs when fully operational, although core staff numbered less than 10.

“There was a small number of people affected,” Mr Haberle said. “It wasn’t a large proportion of what our business operates in here in Australia.”

Mr Haberle said Robert Bosch (Australia) had not initiated a staff redundancy program since March, and that there had been “nothing on the same scale” in terms of staff lost through “natural attrition”.

“Have the cuts been deeper? On the costs side, we’ve definitely had to look at the way we do business here, with asking for voluntary leave. We’ve tried to use those types of activities to really protect ourselves against the effects of the GFC rather than further cuts,” he said.

“Naturally, you also have ‘natural attrition’ and severences as well, which happen over the course of any (business). So there have been more people come and go in natural fluctuations anyway throughout the year compared to that March redundancy program.

“We’ve used a model where we’ve asked people to take voluntary leave – and have not had to reduce pay. So that’s a different case compared to the rest of the world.”

As GoAuto has reported, Bosch Group chairman Franz Fehrenbach revealed at the Frankfurt motor show in September that Bosch would shed 10,000 jobs worldwide this year and maintain reduced working hours for 100,000 employees as the effects of the global economic downturn continue to plague the world’s biggest automotive supplier.

Mr Fehrenbach said sales across the entire Bosch Group were expected to fall by about 15 per cent this year, to €38 billion ($A64 billion), although in its automotive businesses this could decline as much as 20 per cent.

He also said it could take until 2012 for Bosch to return to “pre-recession” (2007) levels.

Mr Haberle said this week that the Australian operation had a similar outlook.