Toyota quits: Akio Toyoda ‘heartbroken’

TOYOTA Motor Corporation president and CEO Akio Toyoda said he was “heartbroken” to announce the decision to end Australian manufacturing in 2017, but added that the local automotive landscape left him with little choice.

While an intra-company review into the viability of producing a next-generation Camry at Toyota’s Altona factory in 2018 was concluded two weeks ago, the final decision to close down its production operations was made on Monday, at a joint board meeting in Japan and Melbourne.

A few hours later, Altona workers were informed by Mr Toyoda – who insisted on being there in person – and Toyota Motor Corporation Australia (TMCA) president and CEO Max Yasuda.

The decision means the facelifted Camry and Aurion due in 2015 – the result of a $123 million co-investment between Toyota and the federal and Victorian governments – will be the final cars developed and produced here in serious volumes.

It also means about 2500 workers at Altona – around 2000 on the line at the vehicle assembly and engine plant plus 500 white-collar staff – will be out of a job. In addition, the Toyota Technical Centre in Melbourne will be wound back.

Toyota refused to pin the blame for its decision on any single factor, instead saying unfavourable exchange rates – which hurt its large-scale export of Camrys to the Middle East – high labour costs and local market fragmentation all contributed.

The company was also badly hurt by the decisions of Ford and Holden to quit local manufacturing in 2016 and 2017 respectively. It could not get the requisite economies of scale to viably source from Australian parts-makers.

When asked by GoAuto, Mr Toyoda refused to comment on whether the Abbott government’s position on local manufacturing – to cut car industry funding – was a decisive factor, and whether the company’s decision would have been different if the political climate was different as well.

“I won’t be able to respond to hypothesis or ‘if’ questions,” he said. “But I would like to say first of all we are grateful for the support the government has provided to us … and also this decision was not based on the single factor, but based on various factors.

“However, even though we have made this decision, we maintained a strong will to maintain production in Australia, and our people have made great effort in improving the competitiveness of product we make had.

“It does not mean TMCA is inferior compared to other affiliates of TMC, but in fact their effort owes great reward. TMC affiliates should hold great pride in what they have achieved, and we are also grateful for what support the government has given us.”

TMCA was two years into a five-year plan to cut the costs of making cars at Altona, and last year said it would need to trim a massive $3800 from the cost of every car it produced. Mr Yasuda told GoAuto the company came “close”, but evidently not close enough.

“It was close, but there are so many factors beyond our control which impacted mid-term and long-term future … being the sole manufacturer in this country gave us a very, very big challenge to make auto manufacturing in this country viable,” he said.

Speaking from the Altona plant, Mr Toyoda said the decision was a personal one for him, because a direct relative Eiji Toyoda – regarded as the architect of TMC’s global expansion while serving as president between 1967 and 1981 – was involved with the commencement of Australian production in 1963.

Australia was the first place to build Toyotas outside of Japan.

“Despite numerous headwinds we believed we should do what we could to keep producing cars here,” he said. “Our people came together as one team, and with the support of suppliers and the government, we gave everything to that effort.

“Unfortunately, however, we have now had to make this painful decision to end production by the end of 2017.

“We started production in 1963 ... I feel a personal connection to Australia.

Australia and Toyota have built cars together for 50 years – two-thirds of Toyota’s 75-year history.

“Over that time, the road was not always smooth, but our people used their skills, knowledge and experience, and took great pride in their work and produced high quality cars day in, day out.

“Throughout, our customers, suppliers, state and federal governments and the community have made us feel at home, helped us grow, and supported us. On behalf of Toyota, please let me express our sincere thanks for what this country has taught Toyota as it grew into a global business.

“Having to deliver this news to the people who have supported our production, is most regretful, and for me personally, simply heartbreaking.

“Although TMCA will change into a sales company, Toyota’s commitment to continue providing great cars and services to Australian people, something we have done for 50 years, and will do for the next 50 years, will not change. You have my word.

“I can assure you Toyota will work hard to continue our contribution to Australia, and that is why I have come here today, to convey this message.” Parts industry: “It’s a bloody disaster”Toyota quits: PM moots extra infrastructure fundingToyota quits: Decision was a “close” callToyota quits: Australia to lose car-making in 2017Toyota quits: Decision was a “close” call.Toyota quits: Next-gen Camry was “close”Toyota quits: Devastating day for industry, says unionToyota quits: Axe hangs over tech centreToyota quits: Local industry ‘will never be the same’