Tony Abbott warns colleagues of more economic pain in the wake of Toyota’s decision to pull out of Australia.

Tony Abbott warns party room of more economic shocks to come in wake of Toyota pullout

February 12, 2014

Mark Kenny

Tony Abbott has told his colleagues that there would be more economic shocks to come in the wake of Toyota’s decision to pull out of Australia.

The warning came as the manufacturing sector reeled from the news amid fears that related high-technology manufacturing might also face extinction.

Mr Abbott told Parliament he was as devastated as anyone by the car company’s planned departure.

”I fully share the dismay of members opposite, of members on all sides of this house, at the announcement that Toyota made yesterday,” he said. ”Every single one of us, every single one of us, is devastated by this announcement, just as we were devastated by the announcement in December that Holden would cease manufacturing.”

Earlier in the day, he warned his MPs that economic adjustment was never easy. ”There have been economic shocks and there will be more to come,” he told the Coalition party room, a spokesman said.

”We feel the concern for people in painful economic circumstances but our concern shouldn’t allow us to depart from the truth that only profitable businesses create jobs.”

But with pressure intensifying from the opposition to explain what was done to convince Toyota to stay, Mr Abbott counselled against the folly of governments ”chasing businesses down the street with a blank cheque”.

The issue dominated the first parliamentary question time for the year, with the opposition accusing the government of callous indifference to workers in the automotive sector.

Mr Abbott said Toyota would have cut production costs but had been frustrated. ”I very much regret the fact that when Toyota just a few months ago sought to talk to their workers about improving productivity in their factory, they were denied because of the operation of our system that opportunity,” he told Parliament.

The comments were a reference to the refusal by automotive sector unions to allow the company to vary enterprise bargaining agreement provisions as it moved to cut costs in its Australian operation.

Toyota confirmed on Tuesday that it would continue with a challenge to the recent Federal Court decision disallowing any changes to its EBA outside of the specified variation conditions. The government, through Workplace Relations Minister Eric Abetz, also confirmed that it would persist in backing the Toyota challenge.

In Parliament, Mr Shorten accused him of blaming automotive workers on $50,000 a year for the company’s withdrawal.

The opposition stepped up its claim on Tuesday that Toyota had been planning to build two new models in Australia from 2017 and that those plans were being developed as recently as the second half of 2013, but the withdrawal of Holden prompted a rethink at the makers’ Japanese headquarters.

Former industry and innovation minister Kim Carr has revealed he was in active discussions with Toyota management during the final days of the Labor government about the future of the industry. He was confident the cars would have been built here subject to suitable financial assistance. One of them was a new generation Camry.

The claim appears to be supported by a Toyota submission made to the government’s Productivity Commission inquiry into the automotive industry in December. In its submission, the car maker listed as its key request an auto industry policy described as ”a long-term, consistent, globally competitive policy suitable for the Australian context to attract future investment”.

Mr Abbott’s office confirmed on Tuesday that the Prime Minister had received no advance notice of the Toyota decision.

The company’s global head Akio Toyoda, its Australian chief Max Yasuda, and three other executives flew to Canberra on Monday night for a 9pm meeting with Industry Minister Ian Macfarlane.

Mr Abbott also attended for a brief period. However, it was made clear that the company’s mind was made up and it decision to leave was irreversible.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: