Car making end to hit aerospace
The end of the line for Australian-made cars will affect the viability of the domestic aerospace industry and other cutting-edge manufacturing, the Government has been told.
The Australian Industry Group said the car industry's demise would "rip holes" in the economy because it provided the skills, research and development and design and innovation backbone for many employers.
Toyota said on Monday it would stop making cars in Australia in 2017 after Holden's decision in December to cease production the same year. Ford stops production in Australia in 2016. Former industry minister Kim Carr said the knock-on effects would be immense, from aluminium and glass production to electronics and textiles.
"Aerospace, for instance, directly depends upon the skills developed in the automotive industry," Senator Carr said yesterday. "We lose that. So it costs a great deal more to lose this industry than it does to support it."
Boeing, which employs 3200 people including 1300 in Melbourne where it makes components for its planes, uses many of the same suppliers as Holden, Ford and Toyota.
Its Australian president Ian Thomas warned last year about sustaining the local car industry to protect manufacturing's "shared ecosystem".
"The robots come out of automotive. Our suppliers also supply automotive," Mr Thomas said. "It is a shared ecosystem, whether it is on the R&D side and some of the fundamental research, or on the skilling side for our employees. There is a lot we learn and draw from automotive."
But Prime Minister Tony Abbott said Boeing - which he described as "perhaps the largest manufacturing employer in Australia" - was "flourishing".
He said Toyota executives told him there was nothing the Government could have done to change the decision.
Opposition Leader Bill Shorten said the Government's "wilful neglect" would bring on an economic tsunami risking recession in Victoria and South Australia.
NAB chief economist Alan Oster said though recession in either States was unlikely, there would be substantial long-term costs, especially if the industry's demise came as the mining sector cut thousands of construction- related jobs in coming years.
"The end of taxpayer support for the auto industry will in itself potentially add to growth by helping lower the cost of vehicles and redeploying labour into other, hopefully more productive, uses," Mr Oster said.
