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Jessica Berry

Holden will cease manufacturing cars in Australia in 2017

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Even state Labor are still saying we'll have a massive surplus in a year or two.

 

Well given that Labor are currently in power and face an election next month, they're hardly likely to say anything different. Although even they don't say it will be a 'massive' surplus. They predict it will be 'modest', which seems to be a novel synonym for 'fanciful'.

If the state can see $376m wiped off its finances in two months and hasn't yet faced the hit of Holden closing or having to pay for its infrastructure projects, it's very hard to see how it will produce a budget surplus in 2016. Beginning that year, SA tax payers start paying for the RAH. That alone will swallow $397m each year for the following 30 years (that's bigger than the $376 black hole that's got them so worked up). That figure's not to pay for the patient care during that time, or the wages of the doctors and the nurses, but just for the physical infrastructure.

Most of those cranes on the skyline that make the cbd look so 'happening' are only there because of tax payer money, not private investment, and the money hasn't yet been paid – it needs to come from future years' budgets.

Just over a decade ago there were 20,000 more people working in manufacturing than in the public sector in SA. Now the figure has reversed; SA has lost 23,000 manufacturing jobs and gained 20,000 public sector workers. Public sector pay is typically $20k more than manufacturing. This is a massive shift. Paying for the public service in SA accounts for 47% of the state's income. Of course, teachers, nurses, police and those in government departments have to be paid, but this 47% is higher than any other state.

Based on what they pay in taxes, it's hard to see why a business would set up in SA over, say WA, NSW or Qld. In WA, businesses with a turnover above $750k pa pay rayroll tax; in NSW it's $750k and in Qld it's $1.1m. In SA the threshold is $600k. So, it's hard to replace the industry that gets lost in this state because it's cheaper to do business elsewhere.

Unemployment in this state is higher than nationally, but even this disguises the fact that in the last year (somewhat less than a full year, actually) 27,000 full time jobs have been replaced by part time roles.

SA has lived for years on the promise that it's on the 'cusp of a resources boom'. If that's the case, it's still not happened and doesn't look imminent. Even if BHP suddenly found the resolve to expand Olympic Dam (and it's recently been flogging off parts of the site, which hardly seems like a positive sign) and even if some heavyweight decided it was economically viable to go full pelt after the shale gas in the Cooper Basin, these wouldn't be producing a return for SA by 2016.

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Just over a decade ago there were 20,000 more people working in manufacturing than in the public sector in SA. Now the figure has reversed; SA has lost 23,000 manufacturing jobs and gained 20,000 public sector workers. Public sector pay is typically $20k more than manufacturing. This is a massive shift. Paying for the public service in SA accounts for 47% of the state's income. Of course, teachers, nurses, police and those in government departments have to be paid, but this 47% is higher than any other state.

 

I always love all your facts and figures Jim. I think I can remember (I may be wrong as it was a while ago) my brother in the UK saying something along the same lines as above, that this was part of the cause of the economic problems in the UK, the imbalance between public sector numbers and private business and more was being paid out with less coming in.

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Guest BurgessFamily

The state is bust, just a matter of time now. I bet Labor is secretly longing to lose this election so they can blame the libs.

 

$1billion defcit, $376m black hole in the budget, ballooning public sector (up by 500 jobs when there was supposed to be a cut of 4000)... all seems a little out of control.

 

When the libs do get in, they will slash public sector jobs (just like the other lib governments = +40,000 public jobs already gone). As the public sector in SA currently accounts for 12.8% of the workforce, it doesn't bode well.

 

http://www.adelaidenow.com.au/news/south-australia/premier-jay-weatherill-forced-to-reveal-1-billion-deficit-just-seven-weeks-before-state-election/story-fni6uo1m-1226807585896

http://www.adelaidenow.com.au/news/no-money-but-south-australian-public-sector-has-ballooned-by-more-than-500-in-past-year/story-fni6uok5-1226807987399

Edited by BurgessFamily

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Guest Guest12727
The state is bust, just a matter of time now. I bet Labor is secretly longing to lose this election so they can blame the libs.

 

$1billion defcit, $376m black hole in the budget, ballooning public sector (up by 500 jobs when there was supposed to be a cut of 4000)... all seems a little out of control.

 

When the libs do get in, they will slash public sector jobs (just like the other lib governments = +40,000 public jobs already gone). As the public sector in SA currently accounts for 12.8% of the workforce, it doesn't bode well.

 

http://www.adelaidenow.com.au/news/south-australia/premier-jay-weatherill-forced-to-reveal-1-billion-deficit-just-seven-weeks-before-state-election/story-fni6uo1m-1226807585896

http://www.adelaidenow.com.au/news/no-money-but-south-australian-public-sector-has-ballooned-by-more-than-500-in-past-year/story-fni6uok5-1226807987399

 

Murdoch press - pinch of salt

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Isn't it ironic that Adelaidenow is quoted on here in a favourable light when it's positive but then quickly dismissed when it's negative.....interesting and ironic yet contradicting, hummmmmm this forum plot thickens.

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"Positiveness" & "Negativeness" is surely in the eye of the beholder and your perspective on life and what motivates you.

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Another one bites the dust!

 

 

Toyota has confirmed that it will cease all production in Australia by 2017.

 

Approximately 2,500 jobs are expected to be lost when the Japanese car maker closes its Altona plant in Melbourne.

 

In a statement concerning the decision, Toyota Motor Corporation President Akio Toyoda said: “We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort.

 

“However, various negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision.”

 

In December, Toyota had warned that Holden's decision to stop making cars in Australia would place "unprecedented pressure" on their ability to continue.

 

Toyota says it will provide the "best support it can, including employment assistance" too all employees impacted by the decision.

 

(ninemsn 10/02/14)

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Guest BurgessFamily

...and it may not be just the automotive sector going tits up...

 

The receivers of the Perth-based Forge Group say 1,300 workers have lost their jobs as part of a restructure.

 

The mining services contractor went into administration yesterday after its financial backers withdrew support - the ABC understands the company owes around half a billion dollars to creditors.

 

http://www.abc.net.au/news/2014-02-12/forge-receivers-to-cut-about-12c300-jobs/5256230

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For a government to lose one car manufacturer may be regarded as a misfortune... for a government to lose both looks like carelessness (or carlessness, even)

 

(With apologies to Oscar Wilde :wink:)

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Truth is, no job is for life anymore, writes Jessica Irvine

 

  • by: By JESSICA IRVINE
  • From: News Corp Australia Network
  • 4 days ago February 11, 2014 10:43PM
     
     
    Why did Toyota give up? 2:09
  • Play video

 

2435888942_promo216294735_648x365_2435889569-hero.jpg

Carsguide editor Paul Pottinger explains how Toyota struggled to make a profit and the factors that led to it ceasing manufacture in Australia.

 

 

LOSING your job has got to be one of life’s most stressful events, right up there with getting divorced or moving house.

Getting retrenched deals a killer double blow: to both the ego and the bank balance.

 

And so it’s only natural to feel sympathy for the 2,500 Toyota workers who this week found out they will be made redundant by 2017.

 

Not to mention the thousands of other workers in component supplies businesses who will lose their jobs too — often without the generous support likely to be offered to Toyota workers.

 

But the sad fact is that, in the year ended February 2013, about 355,000 Australians were involuntarily retrenched, according to the Productivity Commission.

 

The pain of Toyota workers is just a drop in the ocean compared to the normal churn and insecurity of the modern Australian workforce.

 

Truth is, no job is for life any more, and Australia’s car manufacturing industry has met a natural death.

 

Government life support could only do so much for a patient battling a stubbornly high dollar and relatively high cost labour compared to other producers in the Asian region.

 

Aussie consumers’ penchant for zippy, imported cars hasn’t helped either.

 

 

137162-33df5c1a-9308-11e3-8d43-e004d36a6c9a.jpg

The pain of Toyota workers is just a drop in the ocean compared to the insecurity of the modern Australian workforce. Source: AFP

 

 

When Ford Australia boss Bob Graziano announced almost a year ago that the company would cease manufacturing here in 2016, he noted that Australians could now choose from 65 different brands and 365 different models — one for every day of the week.Every time we bought an imported car, the job prospects of Aussie car makers got a little dimmer.

 

Indeed, this week’s Toyota announcement represents just the final nail in a coffin for the Australian car industry that we all helped to build.

 

Between 2006 and 2013, the number of vehicles manufactured in Australia shrank by a third, from 300,000 to 200,000. The number of firms manufacturing auto component parts also shrank.

 

Around 44,000 Australians today are employed by the automotive manufacturing industry, a drop of 40 per cent since 2006. Given Australia’s total workforce of 11 million, that’s a small and shrinking proportion.

 

Yes, it’s only natural to worry about job losses.

 

 

137216-380faf6a-9308-11e3-8d43-e004d36a6c9a.jpg

The Toyota shutdown - and its knock-on affect - will hit an estimated 50,000 jobs. Source: News Limited

 

 

But the answer is forking out billions of taxpayer money to protect unprofitable jobs, but to redirect energy into thinking about the jobs of the future.Money spent paying salaries at Toyota would be better spent investing in new urban transport infrastructure which would not only create jobs but boost the productivity of all workers by easing congestion.

 

Of course any such projects should also meet a strict cost-benefit analysis.

 

Far from being an unmitigated disaster for our economy, there are good reasons to celebrate the end of the unprofitable business of car manufacturing in Australia.

 

First it was a costly business keeping the patient alive.

 

The Productivity Commission estimates that around $30 billion, in today’s dollars, was dished out to the car industry in the fifteen years between 1997 and 2012.This includes the cost from direct government subsidies and also the cost to consumers of having to pay higher prices for imported cars.

 

Indeed, Aussie consumers could be forgiven for cheering the death of Aussie car manufacturing. There is now no longer any policy reason to maintain the 5 per cent tariff on imported cars. In the 1980s, Aussie car buyers paid tariffs as high as 60 per cent on imported cars — designed to protect local players.

 

That has been wound back significantly, but Aussie consumers have literally paid billions of dollars extra on their car purchases over the years to support car making jobs.

 

On top of that saving for consumers, taxpayer dollars that would otherwise have gone to prop up a dying industry can now be redirected to other priorities like health and disability care.

 

And the end of rules requiring government to prioritise Aussie made cars may also lead to savings in government procurement.

 

It is only natural to worry about where the jobs of the future will come from. Increasingly Australia is becoming a professional services based economy. That is a good thing, but will require additional investment in education and skills formation.

 

So do spare a thought for those who have lost their jobs in the demise of our car industry.

 

But at the end of the day, Australia is better off without it.

Edited by Jessica Berry

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Office roles are already very highly sought after in Adelaide, so I would envisage once the Holden office job seekers come onto the job market, competition will get tougher, although I would imagine not all of the staff will be looking for employment.

 

Thousands of office workers to lose jobs at Toyota, Holden, Ford

 

  • BY JOSHUA DOWLING
  • From: News Limited Network
  • February 23, 2014

 

THE collapse of car manufacturing will wipe out thousands of white-collar jobs at Toyota, Holden and Ford — and, contrary to earlier claims, it will also likely lead to the closure of dozens of Holden and Ford dealerships across Australia.

A combined total of more than 2,000 office workers support the manufacturing and logistics operations at Australia’s three car makers and their roles will be redundant once the factories close by the end of 2017 and Toyota, Holden and Ford become primarily sales and marketing operations.

It will bring the true tally of job losses to about 8,000 at the car makers alone, once white-collar workers join their 2,500 colleagues on the factory floor at Toyota, the 1,700 at Holden and the 1,500 at Ford.

“There will be significant (white-collar) job losses across all three brands, no question,” a Toyota executive told News Corp Australia.

Meanwhile, despite advertisements declaring their commitment to Australia, both Holden and Ford have the unenviable job of rationalising their dealer networks.

As analysis by News Corp Australia shows, Holden has more dealerships than market leader Toyota but sells about half as many cars. Ford has almost as many dealerships as Toyota but sells less than half as many cars.

Sales of Holdens and Fords are at 20-year lows and are likely to fall even further without the preferential treatment given to Australian-made cars in government purchasing contracts.

Each Toyota dealer sold an average of 1,000 cars last year while Ford and Holden dealers sold an average of 440 to 480 cars respectively.

By comparison, Mazda dealers sold an average of 825 cars last year while Hyundai outlets sold an average of 625 cars.

Holden and Ford would not speculate which dealers were vulnerable, citing “commercial in confidence” agreements, and repeated their commitment to remaining in Australia “in the long term”.

But senior sources at both companies told News Corp Australia dealer numbers would likely be cut due to “natural attrition” rather than termination of contracts.

“Ford’s plan since we announced the transformation of our business is to promote profitable and viable dealers,” said Ford Australia spokesman Wes Sherwood.

When asked to comment on industry rumours that several Ford dealers were about to close, Mr Sherwood said: “We don’t comment on discussions with our dealers.”

General Motors spokesman George Svigos said Holden dealers “cover every corner of Australia” because, in the early days, every second car on the road was a Holden.

The company had a peak of more than 300 dealers before the year 2000. Today Holden has 232 dealers, which still is more than any other car brand in Australia.

Holden would not speculate how many dealers would be cut from the network once manufacturing comes to an end.

“The Holden dealer network will continue to evolve to meet customer needs as it has done for decades,” said Mr Svigos.

Meanwhile, Toyota Australia’s total head office workforce today stands at 3,900, but once its 2,500 factory jobs go that will leave 1,400 office staff fighting for their desks.

Holden’s total head office workforce today stands at 3,400, but once the 1,700 factory jobs go that will leave Holden with 1,700 white-collar workers, many of whom are in supporting roles for manufacturing, such as purchasing and logistics.

By comparison the biggest import-only brands, Hyundai and Mazda, have 200 to 250 staff respectively at their Australian head offices and yet each company sells more cars than Ford and almost as many as Holden.

Ford says it will keep about 1,000 designers and engineers to help develop foreign vehicles while Holden says it will retain at least 100 designers who will work remotely on global General Motors projects.

But white-collar job-losses at all three local car manufacturers — Toyota, Holden and Ford — are expected to top 2,000 combined once the industry is shuttered by the end of 2017.

This reporter is on Twitter: @JoshuaDowling

The car industry by the numbers — and why white-collar jobs will go:

Toyota Australia head office workforce: 3900

Factory: 2500

White-collar: 1400

Total number of cars sold in 2013: 215,000

Number of cars sold per head office employee in 2013: 55

Average number of cars sold per dealership in 2013: 1000

Holden Australia head office workforce: 3400

Factory: 1700

White-collar: 1400

Total number of cars sold in 2013: 112,000

Number of cars sold per head office employee in 2013: 33

Average number of cars sold per dealership in 2013: 480

Ford Australia head office workforce: 2700

Factory: 1200

White-collar: 1500

Total number of cars sold in 2013: 87,000

Number of cars sold per head office employee in 2013: 32

Average number of cars sold per dealership in 2013: 440

Mazda Australia head office workforce: 250

Factory: N/A (import only brand)

White-collar: 250

Total number of cars sold in 2013: 103,000

Number of cars sold per head office employee in 2013: 410

Average number of cars sold per dealership in 2013: 825

Hyundai Australia head office workforce: 200

Factory: N/A (import only brand)

White-collar: 200

Total number of cars sold in 2013: 97,000

Number of cars sold per head office employee in 2013: 485

Average number of cars sold per dealership in 2013: 605

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