Fears of recession as the Australian auto market slowly dies
In deflationary and debt-driven forces, the world is in a sorry state.
The once-booming Australian car industry has had a pivotal year. Ford announced in May that it would shut down its entire manufacturing in Australia. General Motors followed suit in December.
Toyota will slowly shut down its assembly line by 2017. The company believes that the death of auto manufacturers in Australia may be an early warning sign of a recession. Toyota said it was devastated to shut down in Victoria, a southern state. It also condemned the Australian dollar’s rigidity.
Around 2,500 Toyota employees will lose their job. However, the economic impact will be far more than what can be imagined right now with the high unemployment rate in automotive supply and beyond. The national economy could lose AU$21bn (19bn US$) and up to 2000000 jobs. This includes sectors such as transport, logistics, and business services.
The Australian Workplace, Innovation and Social Research Centre at the University of Adelaide is headed by associate professor John Spoehr, the executive director of this centre.
He said that the manufacturing-based states of Victoria and South Australia could be in for a recession very soon.
He told the BBC that “this is the end of the auto industry as we have known it.” The impact on the workforce will be “terribly dislocating” as more people will experience long-term joblessness from which it may be difficult to recover.
Prof Roy Green, UTS Business School: “We should’ve realised a long time ago that assembly manufacturing in the car industry was limited. We should’ve prepared for this.”
The Labor Party believes that Australia is now on the verge of experiencing the next Great Depression after the 1930s. The government has made it clear that, in light of current conditions, it is developing a plan to help workers who may be affected by this recession.
What can happen to 50,000 people in 2017?
Academic research studies suggest that a third of those who have been made unemployed in the auto manufacturing industry will never be able to work again. According to Professor Roy Green of the Business School of the University of Technology in Sydney, there is still hope for many others.
We should have realized a long time ago that assembly manufacturing in the car industry was limited, and we should be prepared for today. He says, “We didn’t but we still have plenty of time to plan a successful transition, both for the workers, the industry, and the future manufacturing in Australia.”
Kelvin Thomson (MP for Federal Labor) believes that the influx of foreign workers should be restricted and local jobless people were given first priority.
He says, “We have 700,000 Australians who are unemployed, and unemployment is rising. It’s crazy to keep running migrant worker programs at record levels.”
Many believe, however, that Australia’s dynamic services sector will keep the economy rolling and maintain its prosperity. Some economists believe that it is not possible to be sentimental when an industry’s products are no longer in demand.
We are left with many questions as Australia approaches its inevitable end. Will the Australian economy be affected by the recession in the same way that was predicted?
We should have realized a long time ago that assembly manufacturing in the car industry was limited, and we should be prepared for today. He says, “We didn’t but we still have plenty of time to plan a successful transition, both for the workers, the industry, and the future manufacturing in Australia.”