Toyota chops 350 jobs at Altona

THE Australian car manufacturing industry has taken another blow with an announcement by Toyota Australia that it will axe 350 workers from its Altona manufacturing plant only three months after it started production of its all-new Camry.

The compulsory redundancies were announced to workers in an annual address by company president Max Yasuda, who blamed the high Australian dollar and a downturn in demand, especially in export markets.

“Toyota Australia is facing severe operating conditions resulting in unsustainable financial returns due to factors including the strong Australian currency, reduced cost competitiveness and volume decline, especially in export markets,” he said.

The cuts represent more than 10 per cent of the factory’s 3300 workforce that late last year won a 13 per cent pay rise over 42 months after a long-running dispute, including rolling strikes.

Mr Yasuda warned during the height of the bitter industrial action in September that the dispute could jeopardise the company’s export program, saying the local operation was under severe competitive disadvantage due to currency, high local costs and reduced volumes.

Just last week, Toyota Motor Company announced that it was planning to build another new plant in Thailand – its fourth – to ramp up Toyota vehicle production in that country to 760,000 units a year by mid-2013.

Left: Toyota Australia president and CEO Max Yasuda. Below: Manufacturing minister Kim Carr.

Toyota is the third Australian car-maker to flag difficulties with its local operations this year, with Ford and Holden both seeking grants and other help from federal and state governments to help secure investment in future models.

Holden parent company General Motors warned federal manufacturing minister Kim Carr that closing its car plant in Elizabeth, South Australia, was an option.

Ford production of its locally developed Falcon has been secured only until 2016, raising questions over the future of its Victorian factories in Geelong and Broadmeadows beyond that date.

Toyota car production at Altona, in Melbourne’s western suburbs, has slumped 36 per cent in four years, from 149,000 in 2007, before the global financial crisis, to 94,000 last year. The company forecasts 95,000 units to be made at the plant this year.

Mr Yasuda described the need to reduce the Altona workforce as unfortunate, promising to support affected employees.

“The reality is that our volumes are down,” he said. “What we assumed was a temporary circumstance has turned into a permanent situation.

“This drop of 36 per cent in just four years shows the scale of our challenges.” Mr Yasuda said Toyota Australia would tackle the challenges impacting its business with actions including “workforce adjustment, import vehicle sourcing optimisation, efficiency improvements and cost improvements”.

This spells more bad news for hard-pressed local parts manufacturers, struggling to stay afloat against cheaper foreign competitors aided by the strong dollar.

Mr Yasuda said the latest actions were part of the company’s strategy to transform its Australian operations, including strengthening its manufacturing business.

“Manufacturing is a vital element of our overall operations in Australia,” he said. “The actions we take now to transform our business will pave the way for our future success as a leading manufacturer and marketer of vehicles to local and export customers.” Senator Carr said the situation at Altona highlighted the folly of the opposition’s decision to cut motor industry assistance.

“The Gillard Labor government will continue to support this industry because it is essential to us remaining a sophisticated manufacturing nation, rather than simply a nation that digs things up,” he said.

The opposition’s planned cuts had raised the ire of the parts industry, represented by the Federation of Automotive Product Manufacturers.

FAPM chief executive Richard Reilly said recently that opposition leader Tony Abbott’s commitment to planned cuts of $500 million to automotive industry assistance programs would “impose even more stress on an already distressed automotive component sector”.

However, Mr Abbott was sticking to his guns today, reportedly telling AAP that the Toyota job losses would not force a change of coalition policy.

“The coalition is very happy to make lavish assistance available to the car industry – under our proposals, there will be $1 billion in the Automotive Transformation Scheme,” Mr Abbott was reported as saying.

“I want a viable car industry for the long term in this country, but we’ve got to ensure that it really is viable over the longer term.

“The coalition is prepared to invest in that viability, but we’re not prepared to invest beyond the $1 billion that we say will be in that fund.” Senator Carr said Toyota looked at every option to avoid redundancy of skilled workers.

“The harsh reality of the continuing strong Australian dollar means that Toyota’s export markets are under severe pressure and they are struggling to sell enough cars to keep the Altona line at full capacity,” he said.

“I understand how personally distressing this situation is for each of those 350 workers, and the government will do everything it can to help them.

“The government has a comprehensive range of support measures for displaced workers, including the Labour Adjustment element of the Automotive Industry Structural Adjustment Program, which will be used to assist workers to retrain if necessary and to find alternative employment.” In 2010, Toyota secured $63 million from the federal government’s now defunct Green Car Innovation Fund towards a $103 million refurbishment of the four-cylinder engine plant at Altona to build the new 2.5-litre AR engine for the latest Camry that went on sale in Australia in late December.

That plant is still under construction and not due to start producing engines until late this year. Until then, engines are being imported from Japan.

Ironically, the decision by the federal government to financially support the engine plant refurbishment was claimed to have saved 300 jobs at Altona – fewer than the cuts announced today.

Toyota is about to launch the latest hybrid version of its new Camry in March, to be followed in the second quarter by the locally made V6 Aurion.