Toyota announces Australian manufacturing closure in 2017

The Australian automotive manufacturing industry will cease to exist in 2018, with Toyota Australia confirming it will follow Ford and Holden and end local production in 2017.

Workers at Toyota’s Altona plant were briefed by management this afternoon that the company would end production of Camry, Camry Hybrid and Aurion vehicles as well as its four-cylinder engines.

Toyota says approximately 2500 workers employed in manufacturing roles at the company will be “impacted” when it stops production in less than four years’ time. The company’s corporate divisions will also be affected, with management to determine over the coming months what roles and functions will remain in the future.

Toyota Australia president and CEO Max Yasuda named an unfavourable Australian dollar making exports unviable, high manufacturing costs, and low economies of scale for Toyota’s vehicle production and its local supplier base as factors contributing to today’s decision.

“This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years,” Yasuda said.

“While we have been undertaking the enormous task of transforming our business during the past two years, our people have joined us on the same journey, which makes it even more difficult to announce this decision.”

Yasuda said the company did “everything that we could to transform our business”, but said there were too many factors beyond its control making it unviable to build cars in Australia.

“Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.

“Our focus will now be to work with our employees, suppliers, government and the unions as we transition to a national sales and distribution company. Support services will be available to our employees and we will do everything that we can to minimise the impact of this decision on our employees and suppliers.”

Toyota insists it will continue to employ thousands of Australians directly and indirectly via its national sales network.

The company says it intends to import Camry and Aurion vehicles from 2018 along with the rest of its passenger and commercial vehicle range.

Toyota was the last local manufacturer standing after Ford confirmed its intention to stop Australian production by October 2016 in May last year and Holden followed with in December with plans to exit the industry by the end of 2017.

Yasuda said Toyota was committed to providing support to the local industry as it prepares for the end of vehicle manufacturing.

“We will work with our key stakeholders to determine how to provide the best support to our employees, suppliers and local communities during the coming years,” he said.

“Not only do we need to ensure our local suppliers and employees can plan for their future, we also need to make sure that we continue to produce high quality vehicles and engines for our domestic and export customers.”

A spokesperson for the Australian Manufacturing Workers’ Union told ABC: “This is a very dark day for workers at Toyota. Workers are very upset inside the Altona plant.”

AMWU vehicles division national secretary Dave Smith said the decision would “see thousands of jobs exit Australia, not only at Toyota directly but all the way down the supply chain”.

“The magnitude of this decision in the community cannot be underestimated,” Smith said in a statement. “We are looking at a potential recession all along the south-eastern seaboard.”

Federal opposition leader Bill Shorten labelled the closure an “unmitigated disaster”.

“The car industry has died under the Abbott Government. It’s a disgrace,” Shorten told ABC.

The announcement comes almost exactly two months after Holden announced its local manufacturing exit plan â€" a move Toyota at the time said would “place unprecedented pressure on the supplier network and our ability to build cars in Australia”.

The company hit another roadblock two days later when the Federal Court stopped it from making variations to its workplace agreement, despite the car maker claiming “urgent action” was required to shore up the future of its local manufacturing operations.

Federal Industry Minister Ian Macfarlane last month said there was a “very high chance” Toyota would be forced to stop building cars in Australia if it could not negotiate more favourable workplace agreements.

The exit of Toyota and Holden in 2017 marks the end of the Australian automotive manufacturing industry after more than a century of vehicle production. The first petrol-powered automobile built entirely in Australia was produced by Harley Tarrant in a Melbourne workshop in 1901.