By Melanie Sjoberg
MELBOURNE — While some media and business circles have hailed the recent Nissan plant closure as a necessary rationalisation, prospects in the vehicle industry are no brighter for Nissan's demise. Ford motors has announced that it will shut down its Melbourne and Geelong plants for an extra five days over Easter because of poor sales. The company has an agreement with the vehicle union (VBEF) for up to 10 days of such closure this year, with the stood-down workers getting half pay. Meanwhile, according to a Ford shop steward, rumours are rife that the company will announce redundancies in April.
This follows several earlier rounds of lay-offs at Ford. In November 1990, the company demanded 1000 voluntary redundancies, and in 1991 there were two more lay-off packages of around 400 each, the shop steward told Green Left Weekly.
In the past five years, Ford has spent more than $100 million at its Broadmeadows plant on a satellite paint shop and an extra line for production of the Capri for export. A further $15 million went on what's loosely termed "special projects", mainly involving health and safety.
None of this has improved job security at Ford, nor have large government subsidies done the trick. During the past 12-18 months, well over 10,000 jobs have been lost in the vehicle and component industry. Now, just as a result of the Nissan shutdown, up to 6000 more jobs are under threat in the component sector.
To Labor Senator John Button, the Nissan closure, with its 1800 jobs lost, was a necessary step forward for his car plan, which envisages a smaller number of manufacturers producing a more limited range. There will now be only three manufacturers — Ford, Toyota-Holden and Mitsubishi.
Financial Review economics writer Michael Stutchbury also welcomed the Nissan closure as part of a transition to a more competitive and dynamic industrial base, though he noted a possible reservation that "vigorous import competition is producing a local excess of overpriced unskilled labour".
Meanwhile, the gloom deepens in industrial Springvale as social support services grapple with increasingly desperate calls from victims of the car plan. Many workers are now facing the dole after years of union-supported concessions to make Nissan more competitive and supposedly guarantee their jobs. To add insult to injury, most of the workers heard about the closure on the news.
The VBEF and the ACTU have actively helped to sell reduced tariffs in the vehicle industry as well as multiskilling and redundancies. They are still pushing for further reform, this time single-union coverage of the remaining car plants.
An enterprise agreement currently being introduced in some areas of Ford pushes in the single union direction while also increasing disciplinary procedures and removing penalty rates. Workers will no rates for the first five hours of overtime.
While the VBEF leadership has accepted this, the metalworkers (AMWU) and electricians (ETU) have not. Many Ford workers are angry and frustrated at the lack of consultation in recent negotiations. At Toyota, a similar agreement was rejected by the rank and file only for them to find it had already been ratified by the Industrial Relations Commission.
The sentiment of many car workers was reflected at a February 13 Trades Hall Council public meeting at Springvale to discuss the council's Jobs and Justice campaign. A sacked Nissan worker castigated THC secretary John Halfpenny for the lack of democracy in the union movement. He said he had not had the opportunity to elect any of his so-called representatives, nor to share in decision making.
Defending the government's policy, Button says earlier protectionist schemes only served to foster an industry that could never hope to develop the economies necessary to service a domestic market of fewer than 150,000 vehicles per year.
In return for union cooperation, the Button plan was supposed to deliver a competitive, export-oriented industry. The problem is that car manufacturers are multinational corporations with access to high technology and an ability to transfer operations rapidly. In line with their overwhelming commitment to maximising profits, they have simply taken the government for as much as they could get away with.
A good example is the export facilitation subsidy scheme introduced in the government's 1991 industry policy statement. Under this, locally based car manufacturers were encouraged to export components by an offer of dollar-for-dollar credits towards duty free imports of fully assembled vehicles. These imports have since been the real profit base of the car manufacturers.
In 1988, the five manufacturers made an aggregate loss of $12 million on their domestic production. However, sales of duty-free imported passenger vehicles turned this into a $174 million profit.
In 1989-90, car manufacturers' aggregate pretax profits were $127 million, which became $316 million after inclusion of $189 million from sales of imported vehicles. In 1989-90, Mitsubishi sold enough cars and components back to its Japanese parent company to import all its vehicles duty free.
Through all this, slashing of car workers' jobs, wages and conditions continued on the pretext that this would make domestic car manufacturing more competitive. However, the car companies' real profits were coming from imports. According to Martec, the leading motor industry analytical and forecast group, Nissan failed precisely because it didn't capitalise sufficiently on the import bonanza. In 1991, Toyota sold 30,000 more imported cars than Nissan.
It is abundantly clear that huge public subsidies to the vehicle industry have produced no worthwhile results. Thousands of jobs have been lost, and many more will undoubtedly go. Meanwhile, our cities continue to choke on petrol fumes. It's well past time for a more economically and ecologically sustainable approach to transportation in this country.