Holden’s decision to pull up stumps in 2017 won’t just affect Holden workers. Yesterday's news will also impact the many businesses linked to the automotive industry.
According to ABS figures, there are 45,000 people employed in the automotive sector. And the Australian Industry Group says there are around 3,000 businesses directly linked to the industry.
One such business is Harrington Industries, a privately owned family business that develops and produces complex metal pressings and assemblies. Its products include things like chassis components and brake components.
Founded in 1919, the company had been hoping to celebrate its centenary in 2019.
“Whether we’ll make our 100 years I’m not sure. We’ll probably have to scale down to keep going,” John Harrington Managing Director of Harrington Industries told Manufacturers Monthly.
According to Harrington, 50 per cent of the company’s sales are to the automotive sector. And within that 50 per cent, roughly 30 per cent is to Holden and 20 per cent is to Toyota.
Harrington saw the decline of the car industry coming. “We’ve set up a plant in Thailand to offset this,” he said.
He said that a lot of his customers, such as General Motors, have gone to Thailand and the company has a plant that is close to them.
Another strategy that Harrington has followed in anticipation of the car industry’s decline is diversification. The company also supplies to the mining and medical sectors. And Victor lawn mowers is one of its main customers.
Following Holden’s decision Harrington thinks that Toyota “..will follow suit, so it’s not looking good for manufacturing.”
He doesn’t agree with the government’s handling of the situation. “I don’t think it’s a good decision long term myself. Long term, in 20-30 years, we’ll regret it,” he said.
He said that the industry is still viable and that the government could have taken measures such as buying only Australian made cars itself or giving Australian consumers incentives to buy Australian made.
“The automotive industry has enabled us to win work for the medical industry and even the mining industry,” he said.
“Without car manufacturing, you’re not going to get new companies developing themselves to be able to handle world class manufacturing.”
However, not all manufacturers agree with this view. Carlos Broens of Broens Industries used to manufacture manifold knuckles for the Holden Commodore.
Broens told Manufacturers’ Monthly that he fully supports Holden’s decision and approves of the government’s handling of the issue.
“Car manufacturing is not viable in Australia as the majority of engineering is not viable in Australia,” he said.
“We have priced ourselves out of the world market...by what we pay our people and the cost of living, mark ups, etc.”
And he doesn’t see a bright future for Australian manufacturing in general.
Broens said that the suppliers of car components “..in desperation, will try to diversify into an industry that is already horrendously weak.”
“If that market suddenly gets penetrated by desperados, the whole lot...not only the automotive industry...will collapse.”
“For those who make automotive components there is only one solution – death,” Broens added.