What really happened after the carmakers closed their doors?

[Express]

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What really happened after the carmakers closed their doors?


By Nick Toscano

June 15, 2019


Henry Fuller rarely attracts much notice. A short man with a bushy moustache and salt-and-pepper hair, he lives in an outlying suburb between Geelong and the Surf Coast in a house at the end of a no-through road.

With a neatly kept garden and small pet terrier, he leads a quiet life here. But in the autumn of 2013 his quiet world was upended and his face was broadcast everywhere.

For two days, Fuller became the human face of an unfolding landmark news event – one that roiled the country, divided legislators and sent shivers across the economy.

His employer, Ford, had dropped a bombshell: that it would, after nearly a century of making cars in Australia, shut all its local plants and cull hundreds of jobs, Fuller's included.

"I feel gutted," he told the television cameras outside the factory where he'd worked for 27 years. He was flanked on the lawn by Victoria's then opposition leader Daniel Andrews.

In his mid-50s like many of his co-workers, Fuller described his chances of finding full-time employment in the future as "very slim". The impact on Geelong, he said, would be "terrible".

From 2013 to 2017, the exit of Australia's final three car makers – Ford, Holden and Toyota – wiped out jobs on a scale rarely seen before.

Under pressure from an overvalued Australian dollar, a consumer shift to smaller foreign cars that the local makers largely missed and government cuts to the industry's taxpayer subsidies, factories around the country closed one by one pushing legions of blue-collar Australians out of secure work for the first time in their lives. And for the many thousands more employed in the national supply chains of car-parts makers, a similar fate was feared.

The predictions from some economists were bleak, worried about how masses of displaced older workers would adjust to the modern labour market. And what would it all mean for the areas where car factories were the beating heart? Victoria and South Australia, some warned, risked falling into a recession.

Others – usually those who argued time was up for the billions of dollars of taxpayer money being poured into the industry – predicted the workers would be picked up in a strong economy and that adaptation would be the name of the game. The Productivity Commission estimated in 2014 that government support for the industry had run to $30 billion since 1997.

It's almost two years now since the industry closed its doors, and the gathering verdict, buttressed by detailed research from unions and the companies themselves, is that neither school of thought was entirely right.

Regional economic apocalypses did not develop. But for many, at an individual level, the road has been a tough one.

Within six months of his departure, Henry Fuller was able to find a new job – a good one – as a bus driver for CDC Geelong, whose depot sits immediately across the road from the town's now-defunct Ford engine plant.

"I was concerned about what jobs were out there … who's going to employ older people?" he said. "But I was lucky enough to get full-time employment."

Most of his colleagues and others across the industry, however, have not been as lucky. Soon-to-be-released research commissioned by the

Australian Manufacturing Workers Union for the first time has evaluated the long-term employment outcomes for the thousands of staff retrenched from the automakers and supply chain.

The research has tracked hundreds of workers since the plants closed. It found that 12 months after the last closure in October 2017, one in five of the laid-off employees who wanted to continue working was jobless.

And of those who have managed to land new jobs, only a minority – 45 per cent – were hired on a full-time permanent basis. Many had been through one or more jobs since their retrenchment, the research found, while angst over "job insecurity" and financial pressure was rife.

"My contract is up in February next year," says one former Toyota employee currently working on the docks in Melbourne. "February is actually not that far away, so I'm looking for another job now. Especially one that's full-time."

On top of the insecurity he feels in his role, the 47-year-old single father-of-two says he earns a much lower wage than he was at the car factory, meaning he is struggling to keep on top of household bills and children’s school fees. Having previously earned about $1500 a week, he now takes home $770.


It's hard to find a full-time job out there that actually pays reasonable.
Former Toyota worker


"It's hard to find a full-time job out there that actually pays reasonable," he says. "I didn’t expect it was going to be the same money we were getting at Toyota … but I didn't expect it to be this low, put it that way."

On a macroeconomic level though, the worst-case fears of what could have happened in the aftermath of the car industry's exit from Australia did not come to pass.

There has not been a meaningful jump in jobless numbers. No state-based recession. On many measures including GDP growth and the value of regional manufacturing production, some of the areas hit hardest by the closures have remained steady or even begun trending back upwards, explains Terry Rawnsley, an economist with SGS Economics and Planning.

In Geelong, manufacturing production slowly declined from $1.6 billion in 2012 to a low of $1.2 billion in 2016 – the year of the Ford shutdown.
But the next year it climbed to $1.3 billion, then to $1.35 billion the year after that. In Melbourne's north, where Ford ran its Broadmeadows assembly operations, the value of manufacturing production has in fact been increasing over the same period, from $1.8 billion to $1.9 billion. Elizabeth, home to Holden's South Australian plant, bucked the trend as manufacturing value almost halved to $287 million and unemployment is well above the avereage, but even there GDP grew strongly.

Rawnsley says wider manufacturing industry didn't simply drop off a cliff when the car factories closed their doors.

Pace mattered too. In Townsville in 2016 the closure of Clive Palmer's nickel refinery effectively unfolded overnight and triggered mass layoffs.

In contrast the beginning of the end for Australian car manufacturing was five years in the making, starting when the dollar leapt to $US1.10 and swung a wrecking ball across the sector.


The supply-chain companies knew they couldn't rely on Ford or Holden anymore and the long lead time made it possible for them to diversify.
Terry Rawnsley


Then there was the long notice period – about three years – from when car makers told Australians they would be leaving to when their last vehicles rolled off the line.

"The supply-chain companies knew they couldn't rely on Ford or Holden anymore and the long lead time made it possible for them to diversify," says Rawnsley. "That's why the impacts on the economy weren’t as big as some of those doomsday scenarios."

One of these companies, Luna Nameplate Industries, made adhesive labels and exterior badges found on Australian-built cars.

"Ten or 15 years ago, automotive was as high as 50 per cent of our turnover," says Malcolm Fredericks, whose business employs 40 people. Although it still manufactures these products for imported cars, in a move to become less-reliant on the industry it has expanded into making pop-culture and AFL club badges, too, which are proving successful.

"A lot of companies were still caught on the hop by the closures, and for some it was too late. But it was certainly beneficial that we had that window to diversify."

The local arm of manufacturing giant Bosch was heavily geared towards the car industry which provided about 80 per cent of its Australian revenues.
Bosch Australia president Gavin Smith says the company started to move after noting the falling production volumes.

He says it was telling that there was "no clear strategy by the vehicle manufacturers that would arrest that decline, let along increase volume".

Bosch pivoted hard. It still makes some car parts for export but now also makes advanced factory equipment, agricultural devices and automated driving system, employing more than 300 people in its engineering business.

"Diversification is difficult, takes time, has to be funded, and needs strong leadership," says Smith, noting the company still lost a substantial number of staff in the transition. "It is quite understandable that there would be many different outcomes for different companies."

Although there is never really a good time to shut an industry, experts seem to agree that the period from 2013 and 2017 was not the worst time.
The jobs market was relatively strong and economic conditions were buoyant, helping cushion the blow and lift the likelihood of supply-chain companies and workers making successful transitions. As well, the scale of response by industry and governments, which funnelled millions of dollars into assisting and retraining workers, had an "enormous impact", they say.

Karen Andrews, the newly reappointed Industry Minister in the Morrison federal government, says the end of auto-making "could have been a very bad news story for Australian manufacturing and Australians".

"This is turning out to be a positive story," she says. "The outcomes we are seeing have defied all the doom-and-gloom predictions of 2013."


The outcomes we are seeing have defied all the doom-and-gloom predictions of 2013.
Karen Andrews


The headline statistics paint a somewhat comforting picture. Figures from the car manufacturers themselves show as many as 80 per cent of their retrenched workers had either found new jobs, retired or commenced study.

And around 70 per cent of former supply-chain companies remain in business after downsizing or diversifying into sectors such as defence, medical and construction, according to the government.

"Manufacturing is alive and well," says Andrews, who speaks proudly of the "ability of Australians and Australian manufacturers to innovate and diversify."

Andrews points out that in South Australia, there are 57,100 more jobs today than when Holden announced its exit in 2013 while Victoria had 502,300 more jobs than in 2014.

Experts in the field, however, are quick to highlight that while the impact of the plant closures was tempered by the health of the economy and the labour market – as well as large-scale financial assistance from government and industry – if you scratch a little deeper, the individual worker outcomes is where there are real problems.

"The difficulty with available data on the labour market at a regional level is that it does not capture under-employment," says John Spoehr, director of the Australian Industrial Transformation Institute at Flinders Business School.

"The key question to ask is how many automotive manufacturer and supply chain workers continue to experience unemployment and underemployment."
Chris Greve is an ex-employee at Dana, once a manufacturer of components for Australian-built Fords, who worked at a factory dedicated to supplying Ford's Broadmeadows assembly line.

In his mid-30s, Greve had been "one of the youngest blokes working there", he says. Yet after his retrenchment when Ford shut down in 2016, "it still took me two years to get full-time work again," he says.

"We all got plenty of notice – about three years," recalls Greve. "But we had nowhere to go in the end."

Greve signed up with multiple job agencies, which, in any given week, would send him to multiple job sites across the city. Building caravans in the northern suburbs one day, pick-packing at warehouses in the western suburbs the next. Nothing was long-term, he recalls. Casual shifts were all he could get.

During his five years working at Dana, Greve was able to put away part of his wage and had hoped to buy a house. But after the closure, there were some weeks the job agencies would only find him two or three shifts, which left him no choice but to eat into his savings.

"When you’re renting in a sharehouse, you've still got to pay your electricity, you still have to pay your food bills," he says. "It disappears quick."

It was only when a longer-term opportunity arose, making module bathrooms, that he felt he was able to demonstrate his worth and was finally be taken on with full-time hours.

The struggle to secure long-term work was common of the ex-auto workers surveyed in the latest AMWU-commissioned research, which found less than half of those in paid work were full-time permanent. Eleven per cent were part-time and 44 per cent were casual or on fixed-term contracts. Of those who were jobless, about half had held one or more jobs since their retrenchment. And nearly 40 per cent had applied for 30 or more.

"While initially people might have been placed into jobs, in the longer-term there are still people who are struggling," says Paul Difelice, the Victorian secretary of the union’s vehicle division.

When you talk about closure of the car industry in Australia, one question always lingers: should it have been allowed to die?

The debate splits predictably. Labor, the unions and some in the auto industry argue with more support it could have survived.

"Gee whiz, the subsidies were keeping people in work," says Difelice, "people who were paying their taxes, buying things, creating employment through whatever they purchase, buying homes, buying cars, keeping the economy ticking."

But that support had a substantial price tag - about $1 billion a year - which Treasurer Joe Hockey eventually decided was too high.

"Either you're here, or you're not," former treasurer Joe Hockey famously said in parliament in 2013, taking aim squarely at General Motors, the US owner of Holden.

Hockey declined to comment for this story.

The Productivity Commission inquiry that supported his dramatic decision found the policy rationale for subsidies was weak and the costs outweighed the benefits.

"The labour market in Australia is dynamic," it said. "Many employees lose their jobs in any one year and many people who are jobless are hired."
Looking now it might have added that some are left somewhere in between.

Nick Toscano
Business reporter for The Age and Sydney Morning Herald.

https://www.smh.com.au/business/the-...13-p51xdl.html



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[nikko2]

I work for a large window company based in North Geelong about 5 minuets from the old Ford site, we have had a few former Ford employees come and work with us. The job pays much less than they were used to earning but the people who can learn to live with that are still with us and have been a good pickup for our company, they have lots of skills and, in the most case, want to work.

Unfortunately a couple of people didn’t stay too long, either didn’t like the drop in money or (welcome to the real world), or kept saying things like ‘that’s not how we did it at Ford’s’ (these type of people tend not to last too long in my experience).

I suppose the ones who stayed (and I) are lucky that the company will give anybody a chance regardless of age, sex, previous experience and even criminal record. It’s up to you what you do with that chance.

[b0son]

By definition, the award rate is 'reasonable'. Their problem is they were somewhat spoilt and lost touch with how overpaid they were relative to equivalent workers outside the auto industry.

A friend of my dad's was a Qantas maintenance worker, and he was one of the first to be made redundant when Qantas first started offshoring its maintenance/engineering. He eventually found work, but he was on half the pay at Hawker that he had been at Qantas - for the same work.

Lets not kid ourselves, these big companies with a heavily unionised workforce bear little relation to what workers get in smaller companies, and its little surprise when eventually these big companies cut costs by offshoring. By all means, make hay while the sun shines, but always plan for the good times to end eventually.

[Franco Cozzo]

I'm the last full time employee at my workplace, everyone else after me are casuals, while I didn't come from Ford or the manufacturing industry its hard to find work and if you do its all casual now.

All our new production staff are labour hire staff as casuals, the decent ones may get offered a position directly with us, you've got one chance.

Someone got the *** a few days ago when they asked for the wifi password - cya bro.

The bar is much higher than previously, also having long term at the one place isn't a good look on a resume these days - you've got very limited experience and no ambition or drive and just happy collecting wages.

We've been through 5 or so accountants in 2 years, useless wage collectors.

Theres 120,000 people coming into Melbourne every year, plenty of choice for employers.

If you're one of these people who operates like a yes or no flowchart where you lack initiative then the Centrelink queue is your career choice.

[au2000]

I'm part of the dying breed.. My dad spent 30 years with his firm, not due to lack of ambition, due to his loyalty. His boss treated him right so he stayed, it's a quality I picked up off him and 25 years later I'm with the same employer, yes I've moved about for them, changed roles, promotions etc, I just see myself as loyal, dedicated, I don't abuse my sickies, but I guess now days this is no longer seen as loyalty or dedication

[Citroënbender]

Too right - and I believe we’re the poorer for that prejudice.

[kmav23]

In 10 years time the workplace will change again, with more automation and AI.

[Franco Cozzo]

Originally Posted by au2000

I'm part of the dying breed.. My dad spent 30 years with his firm, not due to lack of ambition, due to his loyalty. His boss treated him right so he stayed, it's a quality I picked up off him and 25 years later I'm with the same employer, yes I've moved about for them, changed roles, promotions etc, I just see myself as loyal, dedicated, I don't abuse my sickies, but I guess now days this is no longer seen as loyalty or dedication

We had a lot of long termers with 20+ years under their belt with the company - they were all forced out under a restructure after they forced them to reduce their entitlements.

We've got two left with 20-30+ years, the majority of our production staff were older blokes.

Too rigid in their old ways, refused to change so they all got shown the door.

When a company identifies it needs a culture change then the long termers are the first on the hit list.

The recruitment industry and our general manager say long termers aren't good employees because they've got limited experience outside of that companies system - they don't adapt to change.

[au2000]

Originally Posted by Franco Cozzo

We had a lot of long termers with 20+ years under their belt with the company - they were all forced out under a restructure after they forced them to reduce their entitlements.

We've got two left with 20-30+ years, the majority of our production staff were older blokes.

Too rigid in their old ways, refused to change so they all got shown the door.

When a company identifies it needs a culture change then the long termers are the first on the hit list.

The recruitment industry and our general manager say long termers aren't good employees because they've got limited experience outside of that companies system - they don't adapt to change.

yeah its funny how it can be seen, in my workplace, i'm referred to as a dinosaur .. no matter how much of the new ways i take on board, i still wear that stigma to the point that promotions for me now are done, I'm good enough to act in the higher roles in my workplace, hell i've even recently been passed up for 3 promotions in 1 month even though i've been in the role for almost a year & have been asked to stay on in it until january 2020, but heaven forbid when i interview i actually get 1 of them full time.

what makes me laugh though is when in my workplace the new way of things does not work & they need to "fix" the issue.. guess who they come up to to sort out the mess & get the ship back on track..

so it leaves you in the position of .. do you stay, work hard, keep your chin up, be positive & keep at it thinking you'll be rewarded one day or do you leave, go somewhere else, start from the bottom again & re do all the jobs you did years ago cause you have to prove yourself all over again..

either way, in today's day & age, i've taught my son a new workplace value, Himself.

[Itsme]

Originally Posted by Franco Cozzo

We had a lot of long termers with 20+ years under their belt with the company - they were all forced out under a restructure after they forced them to reduce their entitlements.

We've got two left with 20-30+ years, the majority of our production staff were older blokes.

Too rigid in their old ways, refused to change so they all got shown the door.

When a company identifies it needs a culture change then the long termers are the first on the hit list.

The recruitment industry and our general manager say long termers aren't good employees because they've got limited experience outside of that companies system - they don't adapt to change.

And you believe this B.S. has nothing to do with change as most people do adapt to changes, think you will find the corporate world is getting too greedy wanting to pay peanuts and the sucks bow to them.


Cheers

[Franco Cozzo]

Originally Posted by Officemanager

And you believe this B.S. has nothing to do with change as most people do adapt to changes, think you will find the corporate world is getting too greedy wanting to pay peanuts and the sucks bow to them.


Cheers

If people adapted to change then change management consultants wouldn't exist and decent sales people are literally handle change management process on a daily basis.

Get used to it bud, it's 2019 not 1979 so keep on skilling up and moving or one of Melbourne's 120,000 new migrants every year may do your job better than you and for less.

All our oldies got forced out and we've not had dramas from any of their departures, a lot of knowledge left with them but that knowledge is captured in shared resources through IT infrastructure.

[Sprintey]

Sort of sad that the fixed knowledge gets the shaft, but it is what it is.

Anyone care to take an opinion on why productivity growth is so lacklustre? That one has been puzzling me as all the tech and interconnectivity should be sending it to the moon.

[Itsme]

Originally Posted by Franco Cozzo

If people adapted to change then change management consultants wouldn't exist and decent sales people are literally handle change management process on a daily basis.

Get used to it bud, it's 2019 not 1979 so keep on skilling up and moving or one of Melbourne's 120,000 new migrants every year may do your job better than you and for less.

All our oldies got forced out and we've not had dramas from any of their departures, a lot of knowledge left with them but that knowledge is captured in shared resources through IT infrastructure.

Ahhh now I understand your reasoning, sorry ol mate the American ideology is not cutting the mustard here in this country, even the yanks are learning to go back to the old ways.
What you stated nearly destroyed our company and now the new owner values the dedicated workers not some American B.S. policies.
As for your migrant comment you proved my point.

[Syndrome]

Most of these people are earning less than they used to.

[roKWiz]

37 years on and it makes me feel proud to have worked for the same boss....me. !

[hayseed]

Originally Posted by roKWiz

37 years on and it makes me feel proud to have worked for the same boss....me. !

DITTO, 31 yrs for Me..

[Express]

I don’t know anything about the car industry but I do about some other manufacturing environments and most of the companies I’ve worked for target new staff who have been employed by at least a few different employers as it means they usually have seen more than one approach to meet an end.

That’s invaluable when it comes to problem solving.

It doesn’t matter that you’ve been required to do the same type of work by each employer or if your roles have varied, it does mean though that it’s unlikely you’ve become institutionalised where you can do the job with your eyes closed as the same problems and approach to them keep reoccurring.

Age also didn’t play a part in selecting new staff, young or old if you showed a willingness to listen and learn, easily embraced change, weren’t offended if your suggestions to supervisory staff weren’t adopted, had an understanding your employment was a part of a bigger picture and most importantly showed you could get along with other employees then you’d breeze through your probation period and would most likely climb a small way up the ladder.

Given that these companies usually filled positions outside of their current workforce to bring in new and fresh ideas it also meant to climb you needed to be prepared to sell your skills to other employers to gain the experience many companies look for.

A change of employer for some people is like a new lease of life and they are the ones who often go on to make a positive mark for themselves and the places they work for.

Over the years I’ve seen more than a few staff start off on production lines or in warehouses and climb to management roles and it doesn’t happen often if you nail yourself to one spot.


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[Crazy Dazz]

Originally Posted by Express

.Within six months of his departure, Henry Fuller was able to find a new job – a good one – as a bus driver...

No offence to all the Bus Drivers, but if that's your definition of a good job, them we're all screwed.

[kmav23]

A young person today entering the workforce would will be changing many jobs, industries and careers in his working lifetime.

The job you went to university / tafe for might not exist in 10 years.

As in life always be ready for change, upskill and reskill and be flexible and hard working.

No point complaining about the past.

[Itsme]

Originally Posted by kmav23

A young person today entering the workforce would will be changing many jobs, industries and careers in his working lifetime.

The job you went to university / tafe for might not exist in 10 years.

As in life always be ready for change, upskill and reskill and be flexible and hard working.

No point complaining about the past.

Correct, I have done this in the last 45 years of my working career.
Cheers

[Express]

Even if you're in senior management, many companies believe your effectiveness has run out at about 5 years and fresh blood is preferred.

As far as production processes are concerned I agree with psychobimbo and Franco Cozzo, good procedures and their documentation are required so a smaller learning curve exists for new staff and without the right employees none of it works.




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