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Holden quits: Toyota considers standalone future

Knock on: General Motors’ decision to leave Australian manufacturing could have a domino effect on Toyota Australia.

Car-making rival’s decision places “unprecedented pressure” on Toyota in Australia

11 Dec 2013

TOYOTA is considering its manufacturing future in Australia in the wake of General Motors’ decision to shut its Holden manufacturing operations.

In a statement released today, Toyota Australia said it was saddened to learn of GM Holden’s decision.

“This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia,” it said.

“We will now work with our suppliers, key stakeholders and the government to determine our next steps and whether we can continue operating as the sole vehicle manufacturer in Australia.

“We will continue with our transformation journey as planned.”

Toyota has already announced that it will make a decision on the future of its Altona manufacturing plant in Victoria by next year.

Toyota is Australia’s biggest car-maker, building about 100,000 Camry mid-size and Aurion large cars a year, with about 70 per cent of those exported to the Middle East.

The Altona plant and related manufacturing facilities in Victoria employ about 3000 workers, all of which would likely go.

In 2012, Toyota began producing four-cylinder petrol and hybrid engines for Camry at a newly refurbished $330 million engine plant that had been expected to supply powerplants for about 10 years or two generations of Camry.

The company has warned that it needs to cut about $3800 from the cost of each car made at Altona by 2018 if it is to succeed in getting Toyota Motor Co approval to build a next-generation vehicle.

If Toyota does pack its bags and leave, Camry production is likely to switch to Thailand where a Toyota plant already builds that model.

With both Ford and Holden going, the knock-on effect for parts suppliers also feeding components to Toyota will be massive, likely dooming the operation anyway.

Australia’s peak auto industry body, the Federal Chamber of Automotive Industries (FCAI), also said it was saddened by the loss of Holden manufacturing.

In a brief media statement, FCAI chief executive Tony Weber only added: “Our thoughts are with the workers and their families at this difficult time.” Victorian premier Denis Napthine says he will seek urgent talks with prime minister Tony Abbott over the fallout from today’s decision by General Motors to close its Holden factories in Australia by 2017.

Victoria will be one of the hardest-hit states by the decision that will cost 1300 Holden jobs at the company’s V6 engine plant at Port Melbourne and thousands more at parts-makers.

Like his federal government counterparts, Dr Napthine was told of Holden’s decision by phone just before state parliament question time.

He said it was a sad day for Victoria.

“It’s a decision that nobody asked for and nobody wanted,” he told parliament.

“But we will face it with the conviction that we are a strong economy.”

South Australian premier Jay Weatherill was due to fly to Canberra tomorrow to try to convince Mr Abbott to improve its offer of assistance to Holden to try to stave off the factory closure.

It is unclear if that visit will still go ahead, but it does, it will no doubt focus on federal government aid to support the workers heading to the dole queue.

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