Australian automakers put brakes on manufacturing

Global Business

Australia’s automotive industry is coming to an end. Holden and Toyota will quit producing cars down under by next year while Ford has already stopped. The moves by the big three car makers not only impact their workers, but also affect the country’s manufacturing sector.

CCTV’s Greg Navarro has more.

Australian automakers put brakes on manufacturing

Losing money despite government assistance, Ford is the first automaker to officially close its manufacturing plants in Australia. Toyota and Holden plan to do the same by 2017. CCTV’s Greg Navarro has more.

At Katik Takeaway restaurant in Melbourne’s north, the grill was crowded: the phone ringing, and orders were piling up.

But despite the immediate business, people here are worried about the future.

That’s because Katik sits across the road from a Ford plant which shut down its manufacturing operation earlier this month, leaving hundreds of workers.

In the 1980’s, Australia’s high import tariffs helped keep the automakers profitable.

But then the federal government made the decision to lower tariffs so that the industry would be globally competitive, meaning that the tariffs went down from 58 percent to 5 percent where they are at the moment. For some countries where we have free trade agreements like China, it was zero.

Australia’s relatively high labor costs also didn’t help in a global economy especially compared to some Asian countries where the same work was done at about a quarter of the costs.

The car makers’ exit will cost thousands of direct and indirect jobs. It will also leave hole in the country’s manufacturing industry, which still plays an important role in Australia’s economy.

The people at Katik Takeaway fear they’ve already lost a good chunk of their business, and like many of the nearby shops – they’re waiting to see just how bad the impact will be.