Bosch cuts Australian manufacturing

ONE of Australia’s most prominent automotive component suppliers, Robert Bosch Australia, is set to relocate three quarters of its automotive manufacturing operations offshore at the cost of 380 jobs at its Clayton plant in Victoria.

The Australian subsidiary of the giant German-based conglomerate has blamed competitive global cost pressures for the decision to phase out local production of anti-lock braking systems (ABS), electronic stability control (ESC), steering wheel angle sensors and electronic control units, more than 90 per cent of which were exported.

The work will be transferred to Bosch factories in Asia and Europe.

However, the company will still make some parts in Australia, retaining 120 automotive manufacturing employees at Clayton to make diodes for world markets, as well as fuel rails and engine manifolds.

Left: Bosch electronic stability control components. Below: Bosch steering angle sensor.

As well, its large chassis engineering operation – which GoAuto understands employs about 160 engineers on projects such as ESC calibration for car manufacturers – will remain.

The ABS and ESC manufacturing operations will be the first to go in 2012, with the production of steering angle sensors and electrical control units to follow by 2013.

Bosch Australia president David Robinson said the decision was made in response to a significant increase in global competition for electronic vehicle components and continuously decreasing prices.

“Products manufactured at the Clayton site are primarily for export, but the plant is no longer sufficiently competitive in these particular export markets.

“For this reason, Bosch will relocate production to certain locations in Europe and Asia, which are more competitive and geographically closer to customers.

“We’ve not taken this decision lightly and deeply regret the loss of jobs. It was a very difficult decision to make, but absolutely necessary for us to remain competitive in an increasingly tough global automotive market place.

“Our priority going forward is to support our employees during this transition. We will honour all employee entitlements and offer extensive outplacement and general counseling services to those affected.” The federal industry and innovation minister Senator Kim Carr said the company did not speak to the government about the move before the announcement of the job losses, which he described as disappointing.

“The government regrets the decision and will stand with workers and the company to minimise the social and economic disruption to families,” he said.

Senator Carr said the company promised to honour all employee entitlements and offer extensive outplacement and general counselling services to those affected.

“Bosch has assured me that the company has a strong and on-going commitment to the Australian market and community,” he said.

“And, importantly, its design and engineering capability will remain in Australia — Bosch will continue to manufacture components for local markets.” The company, which currently employs 1800 people in Australia, is part of the giant German-based technology company the Bosch Group which has operations in more than 60 countries.

Highly respected for its cutting edge electronics and automotive components, Bosch has had a presence in Australia since the 1907 and has been manufacturing locally since the 1950s.

The decision to slice the manufacturing operation by 380 jobs will reduce Bosch’s current workforce at its Clayton centre from 1100 to about 720, of which 120 will remain in automotive manufacturing.

Robert Bosch regional president for chassis systems and powertrain Gavin Smith told GoAuto that the decision to shift the operations offshore had been gutwrenching, particularly its effect on Bosch employees.

But he said prices of automotive components were decreasing and costs were increasing.

“Sometimes we have to make these tough decisions, even these that we don’t like,” he said.

However, he said the company was committed to Australia and did not foresee any further cuts to local operations.

“We don’t see anything other than what has been announced today that people have to be concerned about,” he said.

Mr Smith said Bosch Australia was heavily committed to automotive engineering in Australia, with about 80 engineers working on chassis systems and a similar number on body electronics.

Bosch supplies both engineering expertise and components to Australian car-makers, and says it will continue to supply parts, but more of them will now be imported.

Mr Robinson said other Bosch activities in Australia, in consumer goods, building technology and industrial technology, would not be affected by the latest move.