Strikes delay new Toyota Camry

TOYOTA Australia today confirmed a delay in the production start for its all-new Camry as a consequence of strike action at its Altona factory in Melbourne’s west, regardless of the outcome of a vote by workers next week on a fresh pay offer.

The company had scheduled an October start for the new seventh-generation sedan ahead of a public launch in late November, but rolling two-day-a-week strikes over a pay dispute this month will push production back, with a showroom debut now unlikely before December or even early 2012.

The 3300 workers at the factory and Toyota parts centres in Melbourne and Sydney will vote on the Toyota pay offer over three days from Thursday in a compulsory secret poll arranged by Toyota under the Fair Work Act.

The company sweetened the pay offer last week, to an 11 per cent pay rise over 36 months, instead of 11 per cent over 39 months. Unions representing the workers – the Australian Manufacturing Workers' Union (AMWU) and Communications Electrical Plumbing Union (CEPU) – are seeking 12 per cent over 36 months.

The new Toyota deal also includes requirements for an improvement in absenteeism levels to improve productivity at Australia’s biggest car plant.

The result of the vote will not be known until October 10.

Toyota had scheduled a one-week shut down at its factory this week to complete retooling and other works in readiness for the production start on the new Camry in October.

However, the shutdown was delayed to a date to be fixed to allow production of current Camrys to continue on three single shifts this week to help make up for some of the 3300 cars lost on strike days since September 2.

Left: The new Camry. Below: Camry shipment to the Middle East.

The company needs the cars to meet orders during the run-out of the current model in both Australia and export markets.

Toyota usually builds about 560 cars a day on two shifts, so three single shifts would have yielded about 800 vehicles.

Toyota Australia manager public affairs Glenn Campbell told GoAuto that the delay in the scheduled factory shutdown for line work would mean delaying the launch timing for the new Camry.

He said the size of the delay had yet to be determined, but it was expected to be minimal.

Mr Campbell said the factory shutdown would still need to be done to make assembly line changes before the introduction of the new model, but the timing had yet to be decided.

He said most workers were given the week off as annual leave during such shutdowns, with only production technicians and other specialists working through.

GoAuto understands so-called pilot-build cars are already being produced at the factory in readiness for full production of the new Camry, which received Australian Design Rule (ADR) certification this week (see separate story).

Production will start with the standard 2.5-litre four-cylinder sedan, to be followed early next year by the Camry Hybrid and V6 Aurion.

A new $300 million engine plant is being built at Altona to supply engines for both the Camry and Camry Hybrid from November next year.

Toyota claims the strikes at the plant cost the company $10 million a day in lost vehicle sales alone.

Toyota Australia executive director manufacturing Chris Harrod said the company wanted to resolve the wages issue “effectively and immediately”.

He said the company had instigated the voting process to seek endorsement of the pay offer by the majority of workers.

“This will be the first time employees have had the opportunity to decide on the offer we have put on the table,” he said.

“Strong feedback from employees is that they want the company to present the WPA (workplace agreement) for their consideration and vote.” Mr Harrod said the strikes had impacted exports after never having missed a shipment to the Middle East since Toyota exports started in 1996.

“Failure to supply vehicles to our export customers raises concerns about our ability to meet committed customer orders and places a dark cloud over our ability to maintain our position as the preferred distributor to the Middle East,” he said.

“Toyota has been working through Fair Work Australia and we are eager to reach an outcome with the Unions. It is disappointing that protected industrial action continues to be undertaken.

“We do not believe it is necessary. Our interest is to see people at work. We believe our offer of 11 per cent over 39 months is fair and reasonable given the delicate position of the automotive industry.” The pay dispute has caused a rift among the factory workers, some of whom have elected to continue working on strike days against the directive of the union.

This has riled some pro-strike elements in the workforce, who left pamphlets at the plant calling the strike breakers scabs.

A delay of more than a week or two in Camry production at Altona will cause a conundrum for Toyota sales and marketing planners who will be reluctant to launch their new star model close to Christmas when few Australians will be paying attention.

The alternative would be to keep the powder dry until January, when the launch could be followed by an uninterrupted flow of vehicles from factory to showroom after the annual summer factory shutdown.

The current factory dispute has come on top of major stock shortages caused by the Japanese earthquake and tsunami since March.

Toyota Australia’s Altona plant was forced on to half-shift production in May and June due to parts shortages from Japan, while imports also suffered as factories in Thailand and Japan slumped to as little as 30 per cent of their normal production rate.

The earthquake alone is expected to cost Toyota about 25,000 sales in Australia this year, cutting its projected annual tally to about 190,000.

Toyota hopes to make up for lost time over the final quarter of the year as the production pipeline reaches capacity – a situation that some other car companies believe will result in a flood of stock and major discounting among major players.