Oz Government to Aid Industry Post-Auto Production

Australian Industry Minister Ian Macfarlane says while he was disappointed by GM Holden’s decision to end Australian vehicle production, it didn’t come as a surprise.

“The industry had failed in terms of building a globally competitive motor vehicle and the consumers were voting with their feet in terms of their choices,” Macfarlane tells a news conference announcing a A$155 million ($136.3 million) Growth Fund to help industry transition away from vehicle production.

“Australia has made a decision as to where we go with industry policy and that policy is to ensure that we have innovative, internationally competitive industries and supplying global supply chains,” a transcript of the news conference quotes him as saying.

“The decision by the automotive manufacturers to cease production in Australia is the reason we’ve established this fund. It provides an opportunity for new industries, long-term industries, to be established here.”

The South Australian and Victorian state governments have joined the federal government to provide the A$155 million.

An unimpressed Paul Bastian, national secretary of the Australian Manufacturing Workers’ Union, says the Growth Fund shows the federal government is continuing its war on auto workers.

He says Senate budget hearings in Canberra revealed the government isn’t contributing a cent to the A$30 million ($26.4 million) worker retraining program at the center of the fund.

“We already knew this program was grossly inadequate, but now we learn that the A$30 million skills program is entirely funded by Holden and Toyota and can only be accessed by Holden and Toyota workers,” Bastian says.

The A$155 million is not adequate to deal with the employment, community and broader economic impacts of the auto industry’s closure, he says.

The Productivity Commission estimates 40,000 jobs will be lost, most of them in the supply chain, and Bastian says these workers will have no access to retraining support under the Growth Fund.

“What about the tens of thousands of workers in the supply chain and at Ford who also face losing their jobs because of the government’s war on manufacturing?” he asks.

“Businesses won’t get the support they need to diversify into new products and markets and stay afloat, and they are being left high and dry too.”

Bastian says the government is moving to further cut funding for automotive support, a move that risks the early closure of the industry.

“What the government should be doing is trying to mitigate the impacts of closure by helping businesses to make a transition and helping workers to retrain,” he says.

The Growth Fund plan includes a A$60 million ($52.8 million) Next Generation Manufacturing Investment Program.

It will provide government assistance of up to A$5 million ($4.4 million) per applicant to allow them to transition their business or establish new businesses and assist them with skills and training for manufacturing in Australia.

The grants are capped at 50% of eligible project costs and support high-value projects for up to three years.

High-value activities include those that focus on niche manufacturing; require a highly skilled workforce; compete on quality, uniqueness, reliability and prestige; use innovation; use new composites and high-performance materials such as bio-based sources; and use new technology in production processes such as computer-aided design and manufacturing.

Macfarlane says the program will help industry make the transition to a more advanced manufacturing system, “so we can have industries that have future growth potential over the long term and to allow them to provide the jobs we’ll need as the current manufacturing of automobiles in South Australia comes to an end in 2017.”

He says the aim not only is to overcome the challenge Australian industry faces, but also create opportunities that will provide sustainable jobs over the long term.

South Australian Minister for Manufacturing and Innovation Susan Close says the fund has guaranteed A$30 million ($26.4 million) to be spent in South Australia and her state is contributing A$12 million ($10.5 million) of this.

“It means that companies who are manufacturing and not currently in the automotive area, are going to be able to grow, expand and employ more people and start exporting or increase their exports and therefore help the economy to respond to the challenges that we’re going to see with the closure of Holden.”

Macfarlane says the program aims to identify new investment opportunities to assist Australian industry as it transitions from its traditional base to new, higher value-added and globally linked manufacturing.

“Across Australia, industry is entering a new era and a third wave of development based around internationally competitive advanced manufacturing,” he says. “This transition is particularly important in South Australia and Victoria as the car manufacturing industry winds down.”