Monday, February 10, 2014

Auto jobs getting out of Australia

I would like to make more of this than it is, but in a global economy, this may show that labor can price itself out of a job.
Not exactly like Detroit, but not that much different, either. Cheaper to make the stuff in China and Mexico, and BMW has just opened its first Mexican plant.
One thing to consider carefully, however, is the size of Australia. It is smaller than California, GDP of US$1.57 trillion versus US$2.0 trillion for California, and with a population of 23 million versus 38 million in California. Really not big enough to support a global industry like auto.
  • Toyota (TM) intends to end the production of cars and engines in Australia by the end of 2017, due to high costs, the strong Australian dollar and low economies of scale.
  • Toyota's move is not a huge surprise after the Japanese company warned about the future of its Australian operations last year following the announcement of similar plans by Ford and GM.
  • The exit by the car companies represents the end of an era for Australian manufacturing. Toyota's departure will hit 2,500 jobs directly, although the auto industry supports over 40,000 workers and 150 supplier companies. (PR)
Still a big blow for the economy. It won't be made healthy by manufacturing guns, either, since Australia rounded up the guns in 1996. Unfortunately, the guns didn't cure violent crime nor reduce suicides. 
The US has had a substantial decline in the incidence of violent crimes and crimes involving guns. Maybe due to the elimination of lead in gasoline??
Remember, the secret of the rain dance is TIMING!

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