Rescuing the car industry from its collision course

Treasurer Joe Hockey and the federal government are looking down the barrel at a loss of between 100,000 and 150,000 jobs in Australia if the decision to close General Motors in Australia leads to Toyota also closing.

General Motors would probably have shut anyway, given the uncertainty of government assistance. But Treasurer Joe Hockey’s statement yesterday sealed its fate.

The labour loss for General Motors was never going to be a large number. A big loss of labour will occur if the entire components manufacturing business businesses is destroyed –and Toyota in Australia along with it. There are myriad businesses that support those component manufacturers, all the way down to local food suppliers.

Many of the smaller operations will not have a sufficient money to pay out the redundancies and will require government assistance. This morning, when the General Motors closure seemed highly likely, I set out a plan (based on the Direct Action carbon plan) that could save a large number of component manufacturers and make it possible for Toyota to continue to assemble cars and manufacture engines in Australia (Give Holden's money to the parts makers, December 11).

I urge the federal government to look hard at the plan. No other western nation in the current environment would deliberately create 100,000 to 150,000 unemployed at a time when the end of the mining investment boom and the retail contraction will both cause a similar number of job losses simultaneously.

But as we saw in the Gillard-Rudd years, stranger things have happened.

Footnote: If Toyota pulls out, the components industry will collapse quickly. General Motors will shut down well before 2017.