Manufacturing will go on when Toyota, Ford and Holden close

WHEN Holden, Ford and Toyota close Australia won’t make cars anymore, but there’s life in Australian manufacturing yet.

TWENTY years after the last car rolled off its assembly line, the old Ford factory on Parramatta Road in Sydney’s western suburbs is a hive of activity.

But instead of making cars here, the privately-owned business park is home to more than a dozen thriving businesses employing more than a thousand people.

The site has not lost it’s revhead feel.

Today the heritage-listed 1930s red brick building proudly bears the name “Sime Darby Motors Group” — a company which imports French Citroen and Peugeot cars.

WHY FORD, HOLDEN AND TOYOTA CONKED OUT

The Japanese are here, importing Nissans, and the South Koreans too, with Kia Motor Group employing 100 people on site.

Technology companies Toshiba and Altech Computers (companies unimaginable 20 years ago) are here too, along with offices and warehouses for logistics company DHL, Barbecues Galore and Australian First Mortgages.

Yes, there is life after car manufacturing.

ABBOTT GOVERNMENT TO SUPPORT TOYOTA WORKERS

TOYATO REJECTS BLAMING UNION FOR CLOSURE
Residents of Melbourne’s Altona and Adelaide’s Elizabeth, facing uncertain economic futures after the closure of Ford, Holden and Toyota in Australia, can take some heart.

But there is no denying that Australian manufacturing is shrinking.

Australians produced $104 billion worth of manufactured goods last financial year — a dwindling share of Austraila’s $1.5 trillion economy.

A century ago, one in four working Australians were employed in manufacturing. Today it’s one in 13 and falling, fast. The number of manufacturing workers shrank from more than a million to just 943,700 over the past decade — a loss of 58,000 jobs.

Further declines are inevitable, says Roy Green, the dean of the University of Technology’s business school. “Yes, I think there will be less and less jobs in manufacturing as a share of all jobs.”

To survive, firms will need to link into the global supply chain and focus on delivering high quality products that satisfy niche consumer demands.

Australians often forget how good we are at this, according to Professor Green.

“If you look at the history of Australian manufacturing, those great inventions, right back to the stump jump plough, they emerged out of nowhere. They spring from our innate ingenuity, determination and frontier spirit”.

Ultrasound technology, black-box recording devices, wireless internet and hearing devices all owe their existence to Aussie talents, days Green. “We can do it, people come up with these things.”

A chance purchase of a cheap studio microphone in China in 1981 gave Peter Freedman, the founder and owner of Rodes Microphones, the idea for his business.

Voted manufacturer of the year for 2013, Freedman says he set out with the crazy idea to manufacture 50 microphones a month. Today, Freedman employs 140 people and manufactures half a million microphones a year, exported to 100 countries.

“I’m embarrassed to say business is phenomenal. Our growth potential is unlimited. People think there’s no manufacturing left in Australia, but you need to have a closer look. It’s there, it’s just a little bit more hidden.”

Freedman says smaller business is the real engine of Australian manufacturing, possessing the ability to be more nimble. “We don’t muck around, we make decisions quickly. We don’t have any partners or debts. I’m just having fun.”

UTS’s professor Green agrees small business people, like Freedman, are the future for manufacturing in Australia. “It’s about design and quality and being cool and having a deep understanding of the consumer’s desire. Government coinvestment in assembly manufacturing had to come to an end at some point. The pity for the country is that this wasn’t realised 20 years ago. Each government has not wanted to be the one on the watch when the car industry went under.”

The jobs of Australia’s future will mostly come in services, according to Green. “Some of them will be low value-added, like hairdressing and health care, which have great social value but less economic value. Other services jobs will come higher up the value chain from IT and engineering.”

But if Australians want to keep affording those imported cars, we’ll have to keep exporting too.

If Australia wants to avoid becoming a quarry to the world, governments will have to invest in the skills and know-how of our people to avoid an underclass of unskilled labour like in the US, says Green.

“There’s a certain relentlessness to technological change. You shouldn’t lose sleep over it, in the same way that we shouldn’t lose sleep over the disappearance of the labour-intense nineteenth century industries that were replaced by electricity and the internal combustion engine. The issue is how it is handled.”

And that comes down to skills.

History shows many of the workers retrenched from Holden, Ford and Toyota will lack the skills to keep working.

A study in 2006 by Adelaide-based researchers of the fortunes of workers fired from the Lonsdale Mitsubishi plant found a third of those retrenched never worked again. A third had to accept lower wage jobs. Only a third went on to secure higher paid positions.

Some of the lucky ones found their way into the defence industry. A dozen or so picked up work with ASC, Australia’s largest defence contractor, mostly working on its submarine maintenance program.

There could be a bright future for some retrenched car industry workers in defence, says ASC’s chief executive officer, Steve Ludlam.

“There are certainly skill synergies between automotive and defence industry workers in such roles as design and development engineering, while those from the assembly line would need some degree of additional skills training relevant for ship building.”

The government has committed to a new submarines program that would be worth $250 billion in procurement and maintenance over 30 years.

But the timing is uncertain and unlikely to have commenced by 2017 when the last of the car jobs go.

According to Ludlam: “Any potential for recruitment of Holden workers post the shutdown would be predicated on new defence projects having come on line.”

Richard Reilly, the head of the Federation of Automotive Product Manufacturers, says it will be too late for many auto parts manufacturers who will be “devastated” by the closure of domestic car manufacturing.

Many have begun to successfully diversify and hit the export market, with one particular success story being Hella, an Australian manufacturer of motor vehicle lights, including headlights and rear tail lights, which began manufacturing lamps for the mining industry a few years ago.

But there are more than 30,000 people employed making car parts in Australia and the majority of the demand today still comes from the departing car producers.

“These people are pretty skilled people and hopefully they can get a job in other manufacturing areas,” says Reilly.

With Australia’s jobless rate hitting a ten year high of 6 per cent, time is running out.

But there may still be jobs on offer, for those with the right skills and a willingness to move.

Peter Freedman already employs two former car parts manufacturers in his Sydney microphone factory and is hoping to hire around 40 new workers in the year ahead.

“Unfortunately a lot of them are in Victoria but maybe some will move,” he says. “We’ll be looking. We’re hiring.”

There’s life in Australian manufacturing yet.

WHAT DO YOU THINK?

We always like to know what our readers think. Tell us your thoughts below