‘Heartening’ talks on Toyota factory future

VICTORIAN premier Dennis Napthine says he has been heartened by talks with Toyota Motor Corporation (TMC) executives in Japan about the future of the car-maker’s endangered Altona plant in Australia.

Dr Napthine travelled to Toyota’s global headquarters at Toyota City, near Nagoya, for talks with the company as part of a trade mission to Japan.

He also toured Toyota’s Tsutumi plant that builds Camry – the same car that currently runs down the Australian production lines to the tune of about 100,000 units a year for Australian domestic and exports markets.

Details of the discussions remain confidential, but Dr Napthine told Australian reporters traveling with him that Toyota had said a challenging world market and high Australian dollar were issues that needed to be addressed.

He said Toyota had also flagged concerns about vehicle production volumes in Australia.

However, he said: “I am heartened by the discussions.” Toyota has told the Victorian and federal governments that it needs to slash almost $3800 from the cost of every car built at its Altona factory, in Melbourne’s west, if it is to secure funding for a new generation Camry due about 2018.

Left: Victorian premier Denis Napthine.

The company needs to make a decision on this investment in 2014, meaning the Australian and Victorian governments have just months to come up with a plan to maximise the chances of Toyota continuing as a manufacturer in Australia to the end of the decade.

If Toyota decides to cut and run, at least 2500 jobs at Altona will be lost, along with thousands more in the Australian component and services industries, many of which are based in Victoria.

Such a decision would have devastating consequences on Victorian jobs, and might also tip GM Holden over the edge, as the American-owned company’s plants South Australia and Victoria are also dependent on a strong supplier industry in Australia.

Toyota Australia media and external affairs manager Beck Angel told GoAuto today that Toyota Australia had been represented at the talks between Dr Napthine and TMC representatives.

She said that in line with Toyota policy, the details of the government talks would remain confidential.

Dr Napthine has a lot riding on the decision, as state elections are due in Victoria in the second half of next year – around the time the Altona decision could be expected.

His Liberal-National coalition government holds power by a tenuous single seat, and one of those seats is held by Liberal MP Geoff Shaw who is facing charges over the alleged misuse of his government-supplied car and fuel card.

Ford Australia has already foreshadowed the closure of its Australian manufacturing operations in Campbellfield and Geelong , Victoria, with the loss of 1200 jobs.

Earlier this month, Toyota Australia announced more than 100 voluntary redundancies at Altona by the end of November due to a slump in Camry exports to the Middle East – Toyota’s biggest external market.

The company plans to slow the production line speed from 470 units a day to 431 in the first week of December to bring production into line with demand.

But the company says more efficiency gains are needed if the next-generation Camry is to be secured for local production, along with the necessary export contracts that make such a decision viable.

Toyota Australia is benchmarking Toyota’s Kentucky plant in the United States in its efforts to find ways to cut the cost of production and return Altona to profitability.

While the Victorian government can influence the Altona decision, more responsibility lies with the federal government and its industry minister Ian Macfarlane.

The Canberra-based government controls the largest purse of potential aid for the battling car industry, and is now seeking an urgent interim report from the Productivity Commission to guide its decision on aid for the motor industry over the next decade.

Mr Macfarlane has visited all three Australian car manufacturing factories in recent weeks, holding talks with both company representatives of GM Holden, Toyota and Ford, as well as the state governments of Victoria and South Australia.