Car industry will lose 7000 jobs without government help

A delegation from Australia’s automotive components sector has warned the Federal Government that 7000 jobs could be lost if it does not act immediately to support domestic car sales.

A delegation from Australia’s automotive components sector has warned the Federal Government that 7000 jobs could be lost if it does not act immediately to support domestic car sales.

Car parts makers have seen their sales fall as a result of Ford Australia and GM Holden reducing production in the last 18 months as sales of their main Falcon and Commodore models have stalled. Monthly production volumes have shrunk from around 35,000 a month three years ago to less than 30,000 a month this year.

Ford, which is today expected to announced 500 additional job cuts, will further reduce its production volumes in the coming months.

The car parts makers want plans for a $60 million to $80 million restructuring fund – part of the Government’s response to the review of the car industry conducted by former Victorian premier Steve Bracks – to be bought forward to this year.

Bruce Griffiths, delegation member and managing director of Australia’s largest car parts firm Futuris, told The Australian: “The Government’s car plan is all very well, but it won’t be much use if there is no industry left.

“A survey of our members suggested about 7000 jobs would be lost between now and the end of next year, many of them by February next year, and that was on the basis of market sentiment three weeks ago. Things have deteriorated a lot since then.”

Australia’s component sector is already fracturing under the weight of slowing sales and rising materials prices. The collapse of Victorian supplier Teson Trims late last month highlights the squeeze these parts companies find themselves in.

At the time, National Union of Workers’ Victorian secretary Antony Thow explained that when Teson’s contract with Toyota began, it supplied wheel covers at an agreed unit price of $12, but that had since been slashed to $9.03, despite a 12% hike in the raw materials prices.

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