Australia Toyota
Rick Rycroft/AP
By Maggie Lu Yueyang

SYDNEY -- Toyota Motor (TM) said Monday it would stop making cars and engines in Australia by the end of 2017, marking the end of an era for a once-vibrant auto production base and the loss of thousands of direct and indirect jobs.

Toyota's decision follows the planned exits of General Motors (GM) and Ford Motor (F) announced last year and would leave no global automaker remaining in Australia as high costs and a strong currency make it an unattractive production base.

"We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia," Toyota Australia President Max Yasuda said in a statement.

About 2,500 jobs will be affected when the plant stops building cars in 2017, the company said.

Toyota's exit from Australia after more than half a century there is a setback to Prime Minister Tony Abbott's conservative government,
which is seeking to manage a slowdown in the $1.5 trillion economy as a decade-long mining investment boom slows.

"This is obviously devastating news for everyone involved with Toyota. It's devastating for me and for the government," Abbott said in Canberra.

Union leaders were more vocal in their criticism of the government's handling of the auto industry's woes.

"The loss of the automotive manufacturing industry in Australia will have far reaching consequences around the country and throughout the economy," said Australia Council of Trade Unions Secretary David Oliver.

"[The government has] done absolutely nothing to keep Toyota in this country," he added, warning that A$21 billion ($18.80 billion) would be wiped from the economy and that some regions would go into recession.

The ACTU groups the main Australian trade unions under an umbrella group.

Blow To Manufacturing

A pullout by Toyota had been widely feared because of the blow to the parts supply base from the flight of GM and Ford.

"It's a huge moment for industry in Australia," Industry Minister Ian Macfarlane told reporters in Canberra after Toyota's announcement.

"Toyota have made no requests to us other than express their frustration with the difficulty they were having with the industrial relations process," he said, when asked whether Toyota had sought financial assistance or other forms of aid.

Australia's car industry includes about 150 companies working in sectors from components to tooling, design and engineering, with more than 45,000 people employed directly in the car and parts-making sectors, according to government data.

While Australians bought a record 1.14 vehicles last year, according to the Australian Federal Chamber of Automotive Industries, the proportion made domestically was a record low at barely 10 percent. Toyota was the top-selling brand, holding nearly one-fifth of the market.

Vehicle production in Australia has nearly halved in the past decade to just above 200,000 in 2012 from more than 400,000 in 2004. Sales of locally made vehicles have suffered in recent years as a stronger Australian dollar makes imported cars more competitive.

In contrast, global automakers have been building new factories and ramping up capacity in countries like Indonesia, where a burgeoning middle class and lower costs make it an increasingly attractive production base.


The Death Of An Auto Industry: Ford, GM Pull Out Of Australia, Toyota May Follow

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38 Comments

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belledamnit

Figures they would take their production/mfg bases to another 3rd world country like Indonesia. If you want to sell those cars to Americans, then you better be prepared to keep your mfg facilities in the states - otherwise expect to be boycotted by American consumers.

February 10 2014 at 10:23 PM Report abuse +1 rate up rate down Reply
mdmichel8888

WHITE SHIRT DAY tomorrow Tuesday, Feb, 11........thank you SIT DOWNERS

February 10 2014 at 9:39 PM Report abuse -1 rate up rate down Reply
zrh115

Is there doubt why they're leaving? Same reason major industried have left the States...

February 10 2014 at 9:01 PM Report abuse -1 rate up rate down Reply
rtutbucks

TRUTH BE TOLD, THEY ARE LEAVING DUE TO THE UNIONS

February 10 2014 at 8:50 PM Report abuse -3 rate up rate down Reply
John Perry

What has the Union done to keep the auto industry in Australia???????????????

According to the article "NOTHING" other than moan and whine about the Government doing nothing.

February 10 2014 at 8:25 PM Report abuse rate up rate down Reply
godug

Toyota's sentiment says it all, "Toyota have made no requests to us other than express their frustration with the difficulty they were having with the industrial relations process." The "industrial relations process" is Corporate P.C. code for the Unions being their usual a-hole selves and calling Toyota's bluff. Well, guess who won that hand?!?!?! Those are ALL union jobs out the window...there is no cure for stupid...and the Unions are certainly proof of that.

February 10 2014 at 8:20 PM Report abuse -1 rate up rate down Reply
c2athome

Good old unions do it again, same as the UK market. When will we learn.

February 10 2014 at 7:18 PM Report abuse rate up rate down Reply
Hi BoBo

for sure Obamacare will cost 2.5 millions jobs here in the USA, end we will look worse than australia

February 10 2014 at 6:07 PM Report abuse -2 rate up rate down Reply
2 replies to Hi BoBo's comment
Buk

Prove it

February 10 2014 at 8:54 PM Report abuse +1 rate up rate down Reply
stevfrly

Even Fox ran away from that nonsense. Is turning the idiot box on too much work for you now?

February 10 2014 at 9:21 PM Report abuse +1 rate up rate down Reply
tjstieg

Ah yes, that ugly old "it costs less elsewhere" rears it's head again. I don't know this for sure but I bet that the major cost of production that Toyota is trying to avoid are the labor costs down under.

February 10 2014 at 5:50 PM Report abuse +3 rate up rate down Reply
1 reply to tjstieg's comment
mdmichel8888

its all about corporate greed and screw the worker

February 10 2014 at 9:40 PM Report abuse rate up rate down Reply
RMS

This isn't news. The big three have been assembling cars in Mexico, Canada, and South America for years. Tooling for discontinued models goes to South America for production of parts. And yes, manufacturing costs are more competitive in places like China and Indonesia.

February 10 2014 at 5:43 PM Report abuse +6 rate up rate down Reply
1 reply to RMS's comment
heh1111

and "more competive" means people work for a dollar an hour while the CEO makes twenty million and keeps his and the fellow corprate minions jobs plus gets a bonus from the board of directors because the stock price went up

February 10 2014 at 8:51 PM Report abuse +1 rate up rate down Reply