General Motors’ announcement that it will stop manufacturing cars in Australia by 2017 may have a domino effect on the country’s automotive industry. Toyota will remain the only carmaker building cars in Australia from 2017, but the Japanese company has warned that it will be very difficult to continue under the new circumstances.
“This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia,” Toyota Australia said in a statement.
The company said it would work with suppliers and the government to determine its next steps and whether it could continue manufacturing cars in Australia. Toyota employs 4,000 people in the country and produced almost 100,000 vehicles in 2012. An exit from Toyota would also threaten around 150 parts and component suppliers directly employing more than 40,000 people.
The automaker is currently negotiating changes to its workplace agreement in a bid to improve productivity and costs. Workers are due to vote on Friday
“A no vote is going to send a very strong message to our parent company that we are not serious about transforming our business,” Toyota Australia spokeswoman Beck Angel told Reuters before the GM announcement.
However, people from the industry and politicians are not very optimistic Toyota will stay. Dave Smith, secretary of the national vehicles division of the Australian Manufacturing Workers Union said it was “almost certain” Toyota will leave Australia.
“It’s been the federal government that hasn’t played ball, it’s been the federal government that has made a decision that 50,000 people should be put out of work,” Smith was quoted as saying by SBS. Independent senator Nick Xenophon added: “You need two manufacturers to get that critical mass. You lose that critical mass, they fall like dominos.”
By Dan Mihalascu
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