Collapse of Car Manufacturers in Australia and the Role of Unions

Running head: AUTOMOTIVE INDUSTRY
Collapse of the car manufacturers in Australia and the role of the union
Name of the Student
Name of the University
Author Note

1AUTOMOTIVE INDUSTRY
Introduction
The change in the economies has resulted in the restructuring of the companies so that the
employers can meet the necessary demands of the employees in the market. The use of effective
strategies will result in avoiding the increment in the unemployment factors that affect the
industry. Toyota Motor Corporation Australia, Ford Motor Company of Australia and General
Motor Holden are planning to stop their units of car manufacturing within the country by the end
of 2017 due to the higher cost of operations and the low cost of the structures [1]. This will result
in creating a significant impact on the economy of Australia in certain parts such as the western,
southeastern and the northwestern part of Melbourne, Geelong and the northern part of Adelaide.
Regions such as Playford in the northern part of Adelaide and Dandenong in the southeastern
part of Melbourne have experienced a higher level of unemployment due to the closure of these
units. The shutting down of the companies has created an impact on the human and the lives of
the people, as their families are suffering as well. This essay will mainly focus on the role of
unions and the vocational training that could have been given to the employees so that it could
have mitigated the risks in closing the car manufacturing companies in Australia[2].
Discussion
The automotive industry that is present in Australia includes many industries under it
such as manufacturing medical equipments and electronics as well. This has provided livelihoods
to many people such as the technicians and the sales workers so that they can earn a better living.
The educational qualification of most of the workers is III/IV certificates that help them in
getting the job. Apart from that only 15 percent of the workers have a degree equivalent to
Bachelor’s or higher [3].

2AUTOMOTIVE INDUSTRY
The relative contribution of the manufacturing industry that is present in Australia has
shown a decline in the economy when compared to the other developed countries. The Gross
Domestic Product (GDP) was high as 13.2 percent in 1975 where as in the year 2013 it reduced
to 6.6 percent. The Australian Bureau of Statistics (ABS) has shown that in a period of ten years
that ranges from 2005 to 2015, there had been a decline in the rate of employment of 10.4
percent to 7.8 percent respectively within the manufacturing industry [4]. The major reason for
this decline is the advances in technologies along with the changes in the preferences of the
customers and the policies of the government as well.
According to [5], the automotive manufacturing sector results in employing 5 percent of
the total population that is present in Australia, which shows that there is no heavy demand of
being employed within the industry. It also employs people indirectly through the various levels
of supply chains that are present in the market for the transportation of the products and the
services. There were around 45,000 people who were employed within the manufacturing of
automotives and its parts in the year 2013 out of which the three major car companies that is
Ford, Toyota and Holden consisted of employing more than 11,000 employees. They had also
employed more than 50,000 employees in manufacturing the supply parts and the services that
were necessary in the supply chain.
In the southern part of Australia, the government had estimated that due to the closure of
the automotive manufacturing plants, it would result in the loss of more than 1500 workers who
were directly related to the company but it would also hamper around 4000 employees who were
included in the supply chain and more than 7000 people within the economy. The estimation f
job losses in the southern part of Australia have been much higher and have resulted in loss of
more than 20,000 jobs due to the closure of Ford and Toyota plants [6]. This has resulted in the