Toyota Altona plant closure and the death of the car industry

Contributed by Joe Montero

The Toyota manufacturing plant in Melbourne closed last Tuesday. For Australia, this is the second last act that will put an end to the 92-year-old car manufacturing industry. The last to go will be the Holden plant at Elizabeth in South Australia.

Car manufacturing in Australia has faced a slow death, which has been integral to the demise of manufacturing. The links between making cars and manufacturing, have been extensive and  the cutting a major artery is causing the whole body begins to die.

This should never have been allowed to happen. That it has, shows Australia does not have a coherent economic policy, in terms of working for a vision for where we want Australia to go.

At the end of the Second World War, the John Curtin government had come around to realise that this is what Australia needed and the Curtin Plan for the industrialisation of the nation emerged. The war experience had found Australia had been disadvantaged by having to rely on imports and it was considered that future prosperity depended on breaking this dependency.

It was also understood that the market on its own was not going to do the job and it required government intervention was needed to build the future on a sound footing.

Unfortunately, immense pressure was put on Australia to not proceed with it. Much of it came from the government of the United States, which saw the plan as having socialist overtones. By going ahead, Australia risked losing access to international credit, which at the end of war hostilities had come under American control.

Curtin also died suddenly and was replaced as Prime Minister by Ben Chifley, who put an end to his predecessor’s plan.

The consequence was that industrialisation still occurred, largely financed by government and based  mainly American owned car industry. Its unplanned nature meant that within a few years there were thirteen companies making cars and trucks on Australian soil.

This was irrational, given the small internal market and in the long run, the industry was going to get into deep trouble. It died a slow death, as one plant after another began to close. A rational plan would have meant fewer operators and these being properly integrated into the needs of Australia. If this had been done, there is a good chance that the industry would be in a solid position now.

Letting the car industry go was not caused by economic necessity, but by an ideological block that denies a government role of any sort, except in continuing to bankroll the companies, up to the last minute. The truth is that the industry was built up with Australian dollars and Australian effort and the companies syphoned off billions to parent companies over the years, which had contributed little investment.

They got a free ride and when they decided to pack up and go, there was no questioning, or even the suggestion that there is something wrong here. Australia’s political leadership just watched it all go.

One could not find a clearer case for intervention. When the last three made it clear that they were going, there should have been action, on the grounds off a national emergency. Australia’s manufacturing base needed to be protected. Given that a large part of the operations of the car companies were already financed by government, there is no reason why the government should not have moved in.

There was a potential opportunity to set the industry on a new rational foundation, as the cornerstone of a manufacturing industry centred on new and sustainable technologies. The know how and capacity existed. What was missing is the political will to do it.

Our manufacturing industry has gone the way of our failure to develop the microchip, the orbital engine and a range of other initiatives that ended up either being shelved or went overseas, because of an inability to secure support in Australia.

Australia’s failures should serve as a lesson to do better in the future.

Meanwhile, 2,500 workers gathered outside the Toyota’s Altona plant, before the final shift. Many of them had given years of their lives to the place and made friends there. Now they are out of a job.

Australian Manufacturing Workers Union spokesman Dave Smith fears many retrenched workers won’t secure the hours they want or need to live in Melbourne.

“At the moment, only about 50-percent of those Ford workers who were made redundant last October have been able to find full-time permanent jobs, and it’s a very worrying trend in Australia.”

The sad thing is that it is so unnecessary. Since the companies were unwilling to keep on operating, the Australian government should have stepped in and kept them a going concern and then gone about their transformation to roll out more suitable and cleaner vehicles.

Australia’s government could have brought together interested parties, those working in the industry, companies in the wider linked in manufacturing industry, dealerships and government, to set up one or more cooperatives.

Investment could have come from the existing superannuation funds, industry and government.

This would have improved the potential of what could have been achieved.

In truth, it is still not too late to act. It would have been much better to move before the plants were closed and dismantled. Nevertheless, it could still be done. There just needs to be support and a will to do it.

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