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Aussie workplace culture one of reasons for Toyota’s exit

on February 12 2014 | in Industry news, Latest news | by | with Comments Off

Toyota’s decision to stop making cars in Australia from 2017 means Toyota NZ will go somewhere else to get models like Camry and Aurion.

It won’t say from where, only that it will continue to get Camry and Aurion from the Melbourne plant until 2017. Thereafter, says Toyota NZ public relations officer Lindsey Birnie, future models “will continue to be supplied from a source to be determined … it’s not our policy to discuss future model planning four years ahead.”

But you can bet its executives already know where the post-2017 Camry and Aurion will be built – they will hardly be throwing darts at a map in the boardroom in Palmerston North of global assembly plants.

The closure of Toyota’s Australian plant and the loss of thousands of jobs was a sure thing, after Ford and General Motors-Holden said they would stop making cars, Ford in 2016, GM-Holden in 2017. All three cited the excessive costs of building vehicles in Australia.

Essentially, the end of federal and state government subsidies (an estimated $A30 billion of aid since 1997), the fragmentation of the market, and the strength of the Australian dollar made it impossible to build viable business cases. That and the fact that the Australian car industry has been monstered in the past 10 years by the explosion of Asian automotive production. (Thailand is the biggest exporter of cars to NZ after Japan. South Korea is next).

Across the ditch, Toyota had argued to the Australian Productivity Commission that it cost about A$3800 more to build a car in Australia than it did in alternative plants. About half of that cost was labour, it said.

The Productivity Commission’s role is simply to help federal and state governments make better policies in the long-term interest of the Australian community. (It has also suggested that Ford, Holden, and Toyota should shut up shop before 2016-2017).

To save money and jobs, Toyota proposed cuts to the three-week compulsory Christmas shutdown, excessive overtime and shift loadings. It also targeted abuse of things like sick days. But Toyota’s unionised workers went to court and a judge agreed that Toyota would first have to get its workers to vote to waive an existing employment clause, one that workers secured after a five-day strike in 2011. Toyota was flabbergasted.

Toyota Australia chief Max Yasuda

Toyota Australia chief Max Yasuda

Analysts in Australia say the culture of the workplace (Friday sick days, claimed blood-bank visits) was clearly a material reason for Toyota’s decision to pull out in 2017.

Toyota Australia chief Max Yasuda hinted two years ago that the company was losing patience with the culture. “If you don’t work on Friday, it is a long weekend right? In this country, and in our plant, they just don’t come in and later on they ask for sick leave,” Yasuda said.

That five-day strike in 2011? Toyota’s unionised workers got a deal that will give them two pay rises in 2014 …


Time line of Toyota Australia

1958 – Toyota LandCruisers imported privately for the Snowy Mountains hyrdo-electric scheme in NSW.

1963 – Port Melbourne plant opens, operated by Australian Motor Industries. It builds the Toyota Tiara, the first Toyota produced outside of Japan.

1964 – Toyota Corona assembly begins.

1967 – Toyota Crown assembly begins.

1968 – Toyota acquires British Leyland’s stake in Australian Motor Industries and invests A$27 million in engine and gearbox plant. Toyota Corolla production begins.

1978 – New Altona plant builds Toyota’s first engine in Australia.

1981 – Altona plant begins producing body panels.

1987 – Toyota Camry production starts at Port Melbourne. New Zealand is its first export market.

1988 – Toyota Motor Corporation Australia established.

1991 – Toyota becomes overall market leader in Australia.

1992 – One-millionth Australia-made car built.

1994 – Altona plant begins building cars – Corolla is the first model.

1995 – Port Melbourne factory closes, Camry production moves to Altona

1996 – Camry exports to the Middle East begin.

1999 – Corolla production ends.

2000 – Avalon model added alongside Camry at Altona, both vehicles exported to NZ.

2001 – 100,000th Camry exported to Saudi Arabia.

2003 – 300,000th Toyota Australia vehicle exported.

2004 – Two-millionth Australian-made car built.

2006 – 500,000th Toyota Australia vehicle exported.

2007 – Toyota Australia exports 97,688 vehicles, a record.

2009 – First Camry Hybrid model is built at Altona, with the help of a A$35 million government subsidy.

2011 – Current generation Camry production begins.

2013 – Toyota Corolla becomes best-selling car in Australia, the first time a Toyota model has been the most popular in the country.

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