‘When Holden leaves it’s crunch time,’ says anxious SA community

http://www.theguardian.com/world/2013/dec/19/holden-departure-crunch-time-community-in-crisis

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As the argument raged about the adequacy of the federal package to soften the blow of Holden’s departure, the community of Elizabeth in the northern suburbs of Adelaide was trying to fully quantify losses that seemed to go far beyond that of one local car factory.

The bare fact is that the factory in question, built in 1958 and employing 1,600 people, will wind up in 2017 when Holden pulls out of Australian manufacturing. But the death of the plant brings the threat of other casualties. Some fear the loss of a local business, others of a home, a beloved brand, a national industrial heritage.

Darryl Waterman has worked at Elizabeth for 16 years after transferring from a company supplying painted plastic parts to Holden and Mitsubishi at Tonsley Park (Mitsubishi pulled out of South Australia in 2008).

He said most workers did not yet know what they were going to do once the factory closed.

“We were trying to keep the place going by accepting a pay freeze earlier this year,” he said. “We realise there’s no hope for that now.”

Waterman said he would probably need to move interstate because prospects for new jobs in Elizabeth – a suburb with one of the highest unemployment rates in the country at 21.3% (2011 figures) – were dire.

“Even though people say this sort of thing happens all the time and industry gets absorbed by the rest of the community, this area does not have a lot of prospects,” he said.

“I’m thinking of moving up to Darwin because I hear there’s a lot of work up there, but here on the production line there’s a couple of guys I worry about.

“They came straight out of school with no skills about 25 to 30 years ago and I think some of those guys will find it real hard to find employment after this.”

Nearby, cafe owner Van Hua had already noticed a negative impact on trade.

Holden workers were regular buyers of coffee in the mornings but Hua says they could no longer afford it.

“Even though they’re still working, they have to save their money now for a rainy day,” he said.

“There is nothing worse than finding out that you don’t have a job tomorrow.”

He worried about the older Holden workers and their ability to compete with younger people for jobs, particularly in Elizabeth.

“But indirectly or directly, the entire country will be affected,” Hua said.

“Say a husband works at Holden and his wife works in the hospital. When Holden shuts they will have just one income. This means they have to cut all their expenses and, for example, buy less clothes for children. The clothing stores lose money. The textile guys suffers. There just won’t be as much money going around.”

Waterman said the manufacturing industry had been dwindling ever since the Australian dollar started rising and Holden’s pullout should be treated as a wake-up call.

“If we can lose something like Holden, then no manufacturing is really stable or secure in the country,” he said.

“And there’s a reason why developing countries across the world are trying to get car industries going in their country. They recognise it helps progress.”

Holden spends an average of $1.75bn a year on Australian-supplied components and parts – $21bn between 2001 and 2012.

Many of the companies involved, such as those in the supply park across the road from Holden at Elizabeth, are expected to lose business, shed jobs and, potentially, shut up shop along with Holden in 2017.

Göran Roos, Advanced Manufacturing Council chairman, estimated it would result in about 7,000 people becoming unemployed in SA, creating a “major” negative impact that would create short-term unemployment, crime, mental health problems, poverty, social misery and housing issues that would take up to 10 years to recover from.

He said the decision to allow Holden to leave showed an underestimation of the importance of manufacturing to Australia, which has a significantly lower ability than Japan, Germany, Sweden, Switzerland, Korea and the US to benefit from new entrepreneurs.

“What you want as a country are manufacturing firms with as large a share as possible of the chain within the country, and with high value adding that also contributes to economic complexity,” Roos said.

“The value added in the automotive industrial system in Australia adds up to around $12.5bn and the tax on this alone will generate an amount equal to the subsidy – not counting the income tax of the 45,000 employees in the system, nor the GST on their spending or any other benefit.

“It is absolutely clear that the subsidy outweighs the benefit.”

Rod Rebbeck, managing director for Multi Slide Industries in Edwardstown, considers his company luckier than some.

He makes wire frames for Holden’s sedan seats as well as a number of brackets and clips, but he also has a diverse customer base outside of Holden.

His business will continue, but if he cannot replace Holden’s workload, he will have to shed up to nine workers from a staff of 40 – which has already been reduced from 158 people six years ago.

“Back in those days we used to do all the dishwasher baskets for Electrolux, and supplied Hills Industries, Kelvinator air conditioners and Simpson washing machines, but that’s all gone now,” Rebbeck said.

“Automotive is about the last thing we’ve got going in Australia.”

Rebbeck said Australia’s annual contribution to the automobile industry was about $18 a year per taxpayer, which paled in comparison to an estimated $90 per person in Germany and around $200 in the US.

Australians would be paying the same money as a result of the people out of work, he said, and the lost manufacturing expertise would never be recovered.

“I think a lot of people don’t recognise just how huge the ripple effect of this is going to be,” Rebbeck said.

“We have transport trucks that take our seats out to Elizabeth at least once, sometimes twice a day.

“These guys won’t have a job because they basically work for us. And then there’s the guy who puts the tyres on the trucks, the guy who services the trucks, the bloke who services the forklift. When Holden leaves it’s crunch time.”

Michael Claridge, managing director at Claridge Holden, a four-generation family business at Malvern that has been selling Holden cars since 1961, has just overseen a $6m revamp to the business’s display rooms and service centre.

His greatest concern was the effect on the wider South Australian economy. He described the complexities of car manufacturing as “enormous”.

The situation was even worse for South Australia because BHP Billiton put its Olympic Dam mining expansion at Roxby Downs on the backburner 16 months ago, which was expected to bring an estimated $45.7bn to SA over 30 years, he said.

Claridge was keen to point out that while Holden is moving offshore, the brand will remain in Australia along with its product line, service centres and parts supply, and a new Commodore – “the best Holden’s ever produced” was in the works to be released in about 18 months.

“While it’s a sad day that production will cease in Australia, it sounds like we’re going to go out with a bang,” he said.

It offers small comfort for Ute Musters in SA member and Holden enthusiasts such as Chloe Fennell, a fuel pump technician who is also studying for a heavy automotive trade certificate near the Elizabeth factory.

She said people like her perceived the new Commodore as the last of a good thing and were lamenting the loss of Holden from the country as another phase in the slow death of Australian manufacturing as a whole.

"It will open the way for the international market to finish off Australia’s automotive industry just as it has with everything else,” Fennell said.

“As a country we’re losing what we’ve been proud to have.

“You say to international visitors, ‘this is what we do over here’, but at the end of the day, most of our stuff is now marked with made in China, or Taiwan or whatever.

“There’s not many manufacturers left in Australia, let alone SA.”

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