Manufacturing News

Fears of significant unemployment may force govt to act on auto manufacturing

The Coalition Government may yet save Australia’s car manufacturing industry because the economic and political ramifications of losing it would be too great to contemplate.

There have been several estimates of exactly what the effects of ending auto manufacturing would be but, according to the AMWU, the closure of the sector will cost 50,000 jobs and reduce economic activity by $21 billion.

News Corp obtained the union’s submission to the Productivity Commission. It states, “We face the stark reality that in the next six months decisions could be taken that would result in the automotive industry closing before 2020.”

The Business Spectator points out that such a scenario may not be politically acceptable to the government. It could see the Coalition losing government at the next election.

The above estimates of job losses also need to be seen in the context of significant cuts in other industries.  For example, before the next election in 2016, there are likely to be 150,000 job losses linked to mining investment. And a further 150,000 may be cut from the retail sector because of the increase in online retail.

Only yesterday we learnt that Exide Batteries, a battery supplier which counts auto makers Holden and Toyota amongst its clients, will sack 27 workers. It the whole auto sector collapse, there would be many more such job losses before the election. 

So, The Business Spectator says, Industry minister Ian Macfarlane may increase his efforts to save the auto sector. He has already said that, in his discussions with the auto makers, everything will be negoatiable. 

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