News - Toyota

Victoria pleads for federal car assistance

Bottom line: Toyota says it will appeal a Federal Court decision that has blocked it from making cost-cutting alterations to its workplace agreement.

Macfarlane urges restraint for unions as Toyota decides whether to stay or go

Toyota logo24 Jan 2014

VICTORIA’S Liberal state government has drawn up a detailed plan designed to keep Toyota Australia producing cars after Ford Australia and GM Holden have closed their factories by 2017.

The main plank of the plan appears to be the provision of extra financial support – believed to be around $300 million – by the federal Government.

The emergence of the plan coincided with another plea by federal industry minister Ian Macfarlane for car industry unions to help the company meet its cost-cutting targets and to drop their campaign of resistance.

Mr Macfarlane has been in Melbourne for two days this week, being briefed on the state government plan and attending a manufacturing forum.

The full plan will be delivered to Mr Macfarlane next week, according to a report in The Age newspaper. It was drawn up over the Christmas break under the guidance of state manufacturing minister David Hodgett.

Both governments are constrained by Toyota’s timing. The company has already announced it will make a decision on the future of the Altona operation by mid-year.

It is believed the $300 million of extra funding under the Hodgett plan would be allocated to retooling the Altona plant in preparation for the introduction of the new model. It is not clear whether this would come out of the Automotive Transformation Scheme (ATS) or would be in addition to any ATS grants.

Mr Macfarlane went on ABC radio station 774 in Melbourne today urging workers to help the company cut costs by allowing changes in their workplace agreement.

Late last year Toyota asked workers to consider immediate changes to their work conditions instead of waiting for the 2015 workplace agreement (WPA) to be settled.

Four members of the Australian Manufacturing Workers Union (AMWU) took action in the Federal Court to prevent any changes under the current WPA.

Mr Macfarlane said this block on making changes to the WPA was the single biggest threat facing Toyota Australia.

"The reality is that unless we can reduce the cost of producing cars in Australia, then the Toyota workers will not have a job in the long-term," Mr Macfarlane said in his radio interview.

He said changes would need to be made if Toyota was to regain some competitiveness against its international competitors, and if Toyota Australia was to become more competitive against other Toyota plants producing the Camry.

"So what I'm saying to the workers of Toyota is think very carefully about the current situation, with the current reforms that Toyota is trying to put in place," he said.

"If those reforms don't take place then there's a very high chance that Toyota will not be able to compete and, therefore, the last car manufacturer in Australia will close."In fact, it is not so much the Toyota workers that have stymied the proposed changes as the Australian Manufacturing Workers Union (AMWU).

The company asked workers to consider the proposed changes and vote in a plebiscite to indicate whether they would accept the changes.

In a similar plebiscite last year, GMH workers agreed to the requested changes, but that wasn’t enough to save the manufacturing operations in the face of strong cabinet opposition to continued car industry support in Canberra.

However, when Toyota approached its workers, four members of the Australian Manufacturing Workers Union led by Charlie Marmara, a senior convenor with the union, applied to the Federal Court for an injunction to prevent Toyota initiating changes to the current WPA.

The court ruled that Toyota did not have the power to modify the existing WPA, so no plebiscite was held. Toyota is appealing the decision. It believes workers would approve the changes if given a chance to vote.

In December, Toyota told the Productivity Commission that a decision would be made in the middle of 2014 as to whether the Altona plant would be able to transition to making the next-generation Camry, due out in 2018.

If it does not get approval from head office, it would mean the last Australian vehicle mass producer would close.

In a bid to stay competitive, Toyota told the commission it was aiming to reduce the cost of production of each Camry by $3800 by 2018. The proposed changes to workers’ conditions were part of this plan.

As a start to this cost reduction campaign, the company wants to make a total of 29 changes to the current WPA as a way of offsetting the two pay rises that have been agreed for 2014 and which Toyota is willing to implement. The first would be a 3.25 per cent rise in April and the second a 2 per cent rise in September.

Court documents show the 29 changes include the chance to cut down the mandatory Christmas break from three weeks to two weeks if demand in Toyota Australia’s Middle East markets is strong.

Workers would be given four months notice if Toyota wanted to cut the break to two weeks in any particular year. They would be able to take the leave at some other time.

In addition, the company wants to change the overtime rules for very senior supervisors. At present, they start collecting overtime from the first minute after their normal shift. Toyota believes that, as senior employees, they should be prepared to put in a little extra time before clocking up extra pay.

The company wants to vary the rules so that overtime pay does not start until at least one hour after the normal shift ends.

Another variation the company wants involves the pubic-spirited blood donor leave rules. At present, employees can claim four hours of leave after donating blood.

However, the company has found that workers tend to take the blood donor leave in clusters on Friday afternoons and on Monday mornings, compounding an absenteeism problem, leaving the plant under-staffed and hindering efficiency.

The company wants to cut the blood donor leave to two hours and have the blood collections done on site in Toyota’s own medical rooms.

The company also wants to tighten up the sick leave rules. At present, employees can take five days with a doctor’s certificate and two days without one. The company wants every day off to be supported by a doctor’s certificate.

Toyota Australia president Max Yasuda explained the need for the changes to conditions when he outlined the company’s intentions last year.

He said the company could not achieve its targets without changing some of the employment conditions built into the current WPA, some of which date back 50 years.

"We need to improve our productivity and reduce the cost of each of our locally built vehicles by $3800 by 2018,” he said.

“Although we have made progress, the speed of change has not been fast enough.

"We need to take urgent action because we are now seeing gaps in our transformation plans. We must develop detailed plans to close these gaps if we want to remain at the negotiating table for future investments."This was a reference to the competition between Toyota plants for the right to produce certain models.

He said wage rises promised under the current workplace agreement and due this year were not under threat.

"We want to stand by our commitment to our employees and honour the two scheduled pay rises for 2014," Mr Yasuda said.

"During the coming weeks we will work closely with our 2500 manufacturing employees, their families and the union to explain why we need to modernise our work practices."

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