Is the Mitsubishi outcome good for SA?

November 17, 1993
Issue 

Alex Tighe, Adelaide

Months of rumour and doubt over the future of two Mitsubishi car plants in Adelaide have been put to rest with an announcement by the parent company Daimler-Chrysler that the Lonsdale plant will be closed down in 18 months.

South Australian Premier Mike Rann has described the company's plans as a "good outcome". Prime Minister John Howard declared that he was confident SA would bounce back from the 700 job losses.

Public statements have left most of the community unclear about just how many jobs will really be cut as part of the Daimler-Chrysler global restructuring of its failing Mitsubishi arm.

Reports have varied between 700 and 1020 jobs. It is likely that 700 will go directly from the Lonsdale engine manufacturing plant and then Mitsubishi is offering another 300 voluntary redundancies from the much larger Tonsley car assembly plant.

According to academic researcher John Spoehr, quoted in the May 22 Australian Financial Review, the indirect job losses from associated car component makers in the southern suburbs could go as high as 2300.

One of the most important immediate tasks is to ensure that the entitlements of the current workers are protected and that they receive extensive retraining and alternative job opportunities.

The state government has launched a rapid response team to assist workers with retraining and development. There is also an advisory group, which includes the current and former executives of Mitsubishi, other senior business and public-sector leaders and the state secretary of the Australian Manufacturing Workers Union. The group intends to make it a priority to "seek out alternative investors for the Lonsdale site".

In this federal election year, with three marginal SA city-based seats, pledges of support from politicians are flowing in. The Howard government has committed a $50-million assistance package, of which $10 million will be dedicated to retraining for the workers to find a new career — that's around $10,000 per worker! It is unclear where the other $40 million will go.

Should the community, through its collective tax revenue, be expected to prop up failing capitalist corporations?

Mitsubishi has been struggling for years in a global car manufacturing industry that is experiencing serious overproduction. Daimler-Chrysler has given Mitsubishi a $5.7 billion bail-out package that it intends to use to cut its global workforce by 30%, reduce production by 17% and yet launch 42 new car models in various countries over the next three years.

Mitsubishi hasn't struggled alone in Australia either. In 1999, Mitsubishi cut 900 jobs in Adelaide and at the same time the SA government offered payroll tax cuts to help it out.

Then in 2001 the federal government offered Mitsubishi $200 million to last until 2005, and the SA government gave it a further $20 million interest-free loan.

Despite the current round of job cuts, the SA government has recommitted another $35 million to help out Mitsubishi in the short term.

The serious question for socialists is whether any of these responses are beneficial. Why are there no alternative options being posed for the Lonsdale plant, such as using these millions of dollars from the state government to transform the plant into mini-bus production to increase public transport options?

Currently the single train line in the south stops at Noarlunga but an extension has been promised for two decades. The southern suburbs spread for at least another 20km to Aldinga and Willunga, where there are barely two buses a day. The prime tourist wine region of McLaren Vale is also within a 30km radius of Noarlunga, yet is only accessible by car.

Socialists must question why the community should support building more cars when pollution and global warming are such serious issues. It would be much better to examine alternative forms of sustainable production that are useful for the whole community, not just to make a quick profit for a corporation. This means we need more community involvement in making the major decisions that impact on all of our lives.

[Alex Tighe is a member of the Socialist Alliance.]

From Green Left Weekly, June 2, 2004.
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