Home World Business Holden assembly workers despair as last Australian car-maker exits manufacturing

Holden assembly workers despair as last Australian car-maker exits manufacturing

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On Friday morning, a unique group of workers will slip into their uniforms: denim jeans, dark boots and black collared jumpers. Some will make coffee, or have a bite to eat, before arriving at their factory, a bit later than usual.

The workers who are left here have lived through bad years; the restructures and downscaling, pay freezes and job cuts.

But they loved their careers, so they stayed to the end.

Production has been winding down. By the time they arrive today, the machines will have already stopped for good.

And just before noon, the workers inside – all 1000 of them – will gather around to mark a very special moment: when the last-ever car was built in this country.

This is a story about boom and bust, the vanishing of an industry, Australia’s final mass car-maker to stop making cars.

It ends where it began, in Adelaide where, in 1856, an immigrant named James Holden opened a store near the juncture of Rundle and King William streets, better-known to locals as “Beehive Corner”.

At first, his store made horse saddles and harnesses. Soon it moved into coaches and carriages, and, before long, it was manufacturing motor-vehicle bodies.

No one knew it then, but, in the decades to follow, this small outfit, JA Holden & Co., would become a thundering national success story, prosperous beyond anybody’s wildest dreams.

“The Holden company is older than Mercedes-Benz, which is notionally credited as being the creator of the motorcar,” Holden’s design director, Richard Ferlazzo, proudly explains.

“Perhaps only Peugeot, who were making bicycles at the time, could claim to be involved in transport for as long as we have.”

Wherever you set the starting line – whether it is James Holden’s saddlery-turned-bodybuilder; or Australia’s first car assembly plant, opened by Ford in Geelong; or the creation of the Holden 48-215, the first fully Australian-made car – by the mid-twentieth century the industry had swelled into an epic economic driver.

I’ve never dealt with as many potential and actual suicides in all of my career.

Rene Ploegmakers, financial counsellor.

Car-making lavished wealth and bestowed skills across a nation, soon beckoning several of world’s best-known auto companies to come and build here, too.

The industry here was more than a big business.

Richard Ferlazzo, Holden GM's director of industrial design, says the company is arguably the world's oldest maker of cars.

Richard Ferlazzo, Holden GM’s director of industrial design, says the company is arguably the world’s oldest maker of cars. Photo: Jason South

It was a source of good-quality jobs for migrants and working-class people, a source of prosperity and a source of immense national pride.

Julia Gillard, when she was prime minister, once poignantly described the iconic moment that former Labor leader Ben Chifley launched the first locally made Holden, a mid-size sedan, in 1948.

“Chifley wasn’t just launching a car,” she said, “he was building a nation; taking Australia into a future beyond wool and wheat.”

Ben Chifley with first Holden 1948. January 01, 1948.

Ben Chifley with the first Holden in 1948. Photo: Fairfax Media

In the 1970s, local manufacturers were producing nearly half a million vehicles a year, and eight of every 10 cars sold in Australia were made in Australia.

By the late ’90s, it dropped to five in 10. By 2006, it was two in 10, and production had plummeted by more than half.

The culprits, the car-makers said, included the runaway dollar, the prohibitive cost of production compared to overseas markets, and the fact that Australia was not populous enough to justify larger and more efficient production runs. Free trade agreements and lowered import tariffs were flooding the country with affordable foreign cars.

Vocal critics, including the Abbott government, took aim at the industry’s hefty taxpayer subsidies as a wasteful drain on public funds in the face of global-level challenges. And, one by one, the country’s biggest car-making factories all began to close.

“Ford, Toyota, Holden …” sighed one auto worker recently, sunken-eyed, on the morning of his last-ever shift. “It’s all gone now … the whole thing …”

It was a long time coming. But the end, when it arrived, seemed swift and brutal.

Job done: Ford employees gather around the Falcon XR6 after it rolled off the assembly line in Melbourne.

Job done: Ford employees gather around the Falcon XR6 after it rolled off the assembly line in Melbourne. Photo: Ford Motor Company

In just 12 months, Ford closed down its factories in Broadmeadows and Geelong, Toyota ceased production in Altona, Holden stopped making the Cruze, and shuttered its Port Melbourne engine plant. And on Friday Holden, the company that began on Beehive Corner, the last Australian car-maker, will complete its exit from manufacturing.

“The closure is going to be a gut-wrenching experience,” says Mark Bernhard, GM Holden’s managing director.

“We are going to lose some terrifically skilled and really passionate people, who have put their hearts and their minds and their souls into their business.”

Holden will close its Elizabeth factory on October 20, 2017, representing the end of Australian car making.

Holden will close its Elizabeth factory on October 20, 2017, representing the end of Australian car making. Photo: Thomas Wielecki

Fit for purpose

Peter Cook has been putting his many skills to good use for 27 years. A fitter and turner by trade, he is also qualified in metallurgy, welding and metrology. For more than two decades his workplace has been a laboratory inside Toyota at Altona in Melbourne’s west.

Working in the “precision-measurement laboratory”, his team used specialised equipment to ensure new car components met extremely stringent production requirements.

“We measure down to a micron,” he says, “which is thinner than a human hair.”

Peter Cook is a Toyota worker of 27 years and has numerous skills.

Peter Cook is a Toyota worker of 27 years and has numerous skills. Photo: Jason South

His last-ever task at the plant, before he and his 2600 colleagues were laid off on October 3, was testing the hardness of the internal metal of a crankshaft, checking that it would not wear out.

“We pride ourselves in making sure everything is spot-on,” he says.

Like the thousands of workers who have been forced out of the auto industry, Cook has received significant government and industry-funded assistance, which has gone a long way in helping people re-skill and search for new jobs.

And with the long notice period (nearly four years from the date Toyota announced it would close to the date production officially finished), he considers himself luckier than the “poor people in other workplaces who show up one day and find out they’re out of a job”.

“There hasn’t been that fright,” he says.

“We have had time to prepare, time to retrain.”

The last car built in Victoria - a Camry - being made and rolled off production line in early October.

The last car built in Victoria – a Camry – being made and rolled off production line in early October.

Cook is tall and lean, with fair hair and a wide smile. His tone is pretty upbeat, all things considered.

But there is a trace of uncertainty that can be heard in his voice; an uncertainty that has become characteristic of many Australian auto workers when they talk about the future.

“My plan?” says Cook, as he takes in a deep breath.

It must be a scary thing, having the job you’ve known and loved for most of your life pulled out from beneath you; having to squeeze back into a tough labour market, and not knowing where you will fit in.

For those departing the blue-collar auto sector – where the average employee has spent nearly 20 years working for one company – uncertainty seems like a reasonable reaction.

So far in Cook’s job search he’s put in 20 applications and had 19 rejections. While hopeful of finding a trades job that matches his skill base, he has also made use of Toyota’s career-transition program, through which he has achieved a certificate IV in small business and a real-estate representative licence.

“I’ll focus on my trades first,” he says. “But I might have to try and get used to something totally different.”

Work wiped out

The extinction of auto manufacturing is wiping out jobs on a scale rarely seen before.

In a very short period, nearly 6000 direct employees across the country have lost stable employment and decent wages for the first time in their working lives.

“And it’s not just the car plants that are affected,” says Dave Smith, vehicle division secretary of the Australian Manufacturing Workers Union.

“It’s the people in the canteens. Security people. Maintenance people. The people who drive the built cars down to the wharves to have them exported.”

Then there are the staff in the supply-chain businesses, where thousands more have been retrenched from hundreds of the smaller companies that have produced various components for locally made Fords, Holdens and Toyotas for decades.

Some companies have managed to diversify into new markets outside of automotive. Melbourne-based Dolphin Products, which, for years has been making seatbelt parts, door handles and drink-holders, has recently moved into the business of making drink bottles, clothes-line pegs and has even landed a contract to manufacture booster shells for a major explosives company.

Workers at Dolphin Products which has transitioned away from a dependence on auto manufacturing.

Workers at Dolphin Products which has transitioned away from a dependence on auto manufacturing. Photo: Wayne Taylor

But for many others who relied on the car-makers for work, this hasn’t been possible. According to government modelling, of the 137 biggest auto-supply chain businesses across Victoria, 25 are downsizing, 16 are closing and 10 have already shut down. The full impact of the manufacturing wind-down might not be known for another two years. But research commissioned by the industry itself suggests it will shrink by 15,000 people and nearly 1000 businesses by 2019.

“A lot of jobs in automotive have been entry-level jobs, where you could come in, get trained on the job and have a satisfactory life, build a house, take the kids on holiday,” says Geoff Gwilym, of the Victorian Automobile Chamber of Commerce.

“We are going to lose that. It’s a terrible thing.”

Salaries in reverse

In August last year, a small group of researchers from Australian Catholic University began work on an important new project. One of the first things they did was stuff thousands of surveys into envelopes and mail them to auto workers all over the state. It was just two months before Ford was closing its two Victorian production plants, and concerns were escalating about what would happen to the thousands of displaced staff, their families and communities.

Sending the surveys by post, it turned out, was a good decision. Many of their recipients rarely used email and were inactive on social media. The average age in the state’s auto industry was 51 years old.

What the researchers ended up with was a representative sample of about 430 employees, and, right from the outset, the findings painted a troubling picture. Despite their age, 76 per cent of those surveyed said they would need a new job once they were retrenched. And the vast majority said it was important that any new job provided the same pay rates they currently earned – a take-home average of $984 a week.

As an ageing workforce, though, many have mortgages and families or feel for other reasons unable to uproot from areas where they have lived for decades to pursue job opportunities. Many are close to retirement, but not close enough. And many simply feel too old to reinvent themselves.

By the time the researchers ran the second round of surveys, by mail-out and in face-to-face interviews, conducted earlier this year, the preliminary results were as feared: very few people had found equivalent full-time work.

“It’s a very sad time, and an anxious time as well,” said Dave Smith, as he stood outside Toyota’s sprawling Altona plant on the final morning of production. He was flanked three workers from the assembly line who were about to lose their jobs.

“We know at the Ford motor company, despite all the efforts to help people, to upskill, to make sure they are ready to transition to new employment, unfortunately that hasn’t happened in terms of being able to find full-time jobs.”

AMWU's Dave Smith at Toyota at its closure earlier in October.

AMWU’s Dave Smith at Toyota at its closure earlier in October. Photo: AAP

Ford says more than 80 per cent of their retrenched workers have landed new jobs, which is promising news. But what is not known is how many hours they are working, or what their wages are like. Figures compiled by the union indicate just 50 per cent of the Ford workers retrenched last October have been able to find full-time work, Smith said. “It’s a very worrying trend.”

The findings of a Flinders University study, launched in 2006, into the fates of workers laid off when Mitsubishi closed the doors to its Adelaide engine plant years earlier, were worse. It found a third of retrenched workers were in full-time employment, a third were out of the workforce or unemployed, and a third were under-employed – that is, working in part-time and casual positions, but not working as many hours as they would like or need.

Tough road

There is a view among industry insiders that the retrenched Toyota and Ford workers in suburban Melbourne will find it easier to eventually land another job. The jobs are out there, they say, it’s just the quality of jobs that is going to be the problem.

But greater fears remain for the workers leaving the production elsewhere, like Geelong, a regional town that has been hit by a spate of blue-collar industrial shutdowns in recent years and remains beset by pockets of disadvantage.

The closure of Ford has hit workers hard.

The closure of Ford has hit workers hard. Photo: Penny Stephens

Worse still are the fears held for the employees who are soon to be forced out of Holden’s plant in Elizabeth, in Adelaide’s northern suburbs, where the unemployment rate is already a staggering 33 per cent, the worst in the state.

“There is generational unemployment in that area of Adelaide,” said one industry insider, “and there was generational employment at Holden.”

As the wind-down gathered pace, fears swelled across the country about a jobs crisis and a possible recession.

The Productivity Commission, in 2014, estimated the end of manufacturing could cost 40,000 jobs nationally. The University of Adelaide said a worst-case scenario could be as many as 200,000.

Unemployment is high in the suburbs around Holden's Elizabeth plant.

Unemployment is high in the suburbs around Holden’s Elizabeth plant. Photo: Thomas Wielecki

Although more recent forecasts have painted a less troubling picture, with substantial growth in other industries offsetting manufacturing job losses on a national scale, Commonwealth Bank economists said unemployment and underemployment would hit specific communities hard. Car factory jobs had been full-time jobs, and there are just not enough full-time jobs to replace them.

“Much of our work is now assisting people who once had reasonable incomes but are now struggling with a lack of work,” says Rene Ploegmakers, a financial counsellor in Geelong.

“The personal impact on those going through this change is high. People are presenting with mental health issues, families under stress, leading to breakdown. I must say … I’ve never dealt with as many potential and actual suicides in all of my career in such a short time.”

Ploegmakers works at Diversitat, which runs a counselling centre on a shopping strip in the town’s west.

Over the past 12 months, wait times for an appointment, he says, have blown out dramatically, from two weeks to six weeks. Wait times are also understood to have risen in Broadmeadows, and in Melbourne’s south-east, where many automaking businesses have been based.

“Our funding hasn’t kept up with demand,” said one financial counsellor, “and part of that demand is coming from an economy that is effectively failing.”

Positive stories

There are still large numbers of people with positive stories to tell about transformations and finding equivalent jobs in other fields.

On top of positions in (often much smaller) manufacturing workplaces, many have gone into sectors as varied as aged care, social work, landscaping, security services, construction, warehousing, cleaning and farm work.

One ex-employee, according to Ford, has trained to become a priest.

Ford Australia employee Andrew Owens.

Ford Australia employee Andrew Owens.

On the Friday night after the final Ford rolled down the line, Andrew Owens, who worked in the paint shop, left the plant for the last time like everyone else. But the 43-year-old was back in a job by Monday: a job he’d always dreamed of.

When he started at the factory at the age of 20, he had intended to stay for a year to make some money. One year led to 10, and then 10 led to 20. He had been there 23 years by the time Ford announced the end of the line for he and his blue-collar colleagues.

The thing about people who work in car manufacturing is that they generally love car manufacturing, but, through no choice of their own, have had leave and consider the future. Owens was no exception, but he “ideally wanted to stay on at Ford”.

That’s when he heard about a job opening at the company’s design centre, where concepts for cars of the future are created.

“I always had an interest in graphic design, and I draw as a hobby,” he says. “Guys at work would always get me to do caricatures and sketches for them.”

So he lined up an interview. “If nothing comes of it,” he thought to himself, “then we’ll go onto the next chapter of my working life.”

In the lead-up to the closure, he got the call back.

His new job, he was told, would be in fabrication, using 3D printers and working on clay and aluminium modelling for exciting new prototypes. And his new office would a gleaming glass building, 300 metres from the smokestacks of the plant’s paint shop where he used to work.

“I’ve worked in body-build, technical roles, quality assurance, the paint shop, and now I’m in the design studio, where it all begins,” he says, beaming. “It’s pretty awesome.”

Former Toyota worker Michael Spiteri hopes to find security work.

Former Toyota worker Michael Spiteri hopes to find security work. Photo: Darrian Traynor

Michael Spiteri, a retrenched Toyota worker, aged in his 50s, used the company’s generous retraining program to complete a six-month course in aviation security.

And he has an interview lined up for next week.

“Hopefully it leads to something,” he says. “I was born into the industry, starting off as a qualified mechanic, then I applied for this job … and here I am all these years later.”

Spiteri acknowledges things are “going to be different out there,” and potentially not as good as the conditions and stability he has enjoyed at the plant.

“But you’ve just gotta move forward,” he says. “I hope everyone finds work again.”

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