Toyota exit: Engine plant headed overseas

MACHINERY from Toyota Australia’s five-year-old engine plant that was partly funded by a $63 million contribution from Australian taxpayers is set to be shipped to an unnamed overseas Toyota affiliate now that the Japanese giant’s local factory has closed.

Opened in 2012, the four-cylinder engine plant was expected to have a 25-to-30-year life expectancy, meaning the recipient should get at least 20 years out of the production system that was set up at Altona to make AR 2.5-litre four-cylinder engines – including hybrid units – at the rate of 110,000 a year for Toyota’s Australian-made Camry and for export to other Toyota plants in places such as Thailand.

The Altona factory was closed yesterday at the cost of 2600 jobs, bringing to an end 54 years of Toyota car manufacturing in Australia.

Toyota Australia president Dave Buttner, who is set to retire at the end of this year, told GoAuto that Altona factory machinery containing Toyota intellectual property was being redeployed to other Toyota facilities overseas, while the remainder was being sold in an online auction.

He gave an example of Toyota-developed machines that made plastic bumpers for Camry and Aurion, which would be sent to an overseas factory to make replacement parts.

He also said machinery from the engine plant would be retained by Toyota and relocated overseas. He declined to say where.

The engine plant was built at the cost of $331 million, which included a contribution from the Rudd Labor federal government and assistance from the Brumby Victorian government.

Left: Toyota Australia president Dave Buttner

When it opened in the second half of 2012 as one of six such plants in the Toyota world, it was the newest part of the Altona factory.

Funding from the federal government’s now-defunct Green Car Innovation Fund was tipped into the project to help Toyota Australia tool up for the seventh-generation Camry, specifically the hybrid.

Just 18 months later, in February 2014, Toyota announced that the factory would close in 2017, partly because rivals Holden and Ford had decided to shut their Australian plants, crippling the parts industry.

At the time, GoAuto speculated that the engine production equipment might be shipped to Thailand, where Toyota builds a range of vehicles, including Camry.

While the machinery is going, Toyota has decided to keep almost all of its sprawling 79-hectare Altona factory campus for a range of duties including its training centre – the so-called Centre of Excellence – not just for Toyota employees but also for dealership staff and other organisations.

“There is the potential we might sell a small portion, but that final decision is still to be made,” Mr Buttner said. “But in the main, of the 79 hectares, we will be retaining virtually all of it.

“We are going to be relocating an existing parts distribution centre in the main body of the plant.”

Mr Buttner confirmed that Toyota would establish a 1km vehicle evaluation track and skidpans at the site.

“It is not a racetrack, it is not a driver-training track,” he said. “It is really an evaluation track. So we want to make sure that the Centre of Excellence is the foremost training centre for our employees, but also for dealer employees.

“So when we have a product launch, we bring our dealer people in there, we have competitive product, we have the appropriate back tracks, ripple roads and Belgian blocks (cobblestones) and skidpans.

“We sent a number of our production engineering and sales people overseas to study similar tracks in the Toyota world, and also to look at some competitors.

We have used some design skills from Japan as well.

“We are just about at the stage now where we start letting contracts but of course we have to finish manufacturing. There is rehabilitation of the site (as well). But that certainly is approved through our board, the money is committed and we will have it.”