Toyota job cuts a huge hit

It's been by far the strongest automotive brand for nearly two decades and 2011 was its ninth consecutive year as Australia's favourite.

So the announcement of major job losses at Altona yesterday is a huge hit for a company which looked, until yesterday, as the most stable and consistent of the three local makers.

It will, inevitably, raise more questions about the viability of carmaking in Australia and the wisdom of government support for the industry - even though a recent study shows that Australians pay only $17.30 in taxes for carmaking, against $27.20 in Britain, $93.70 in Canada and a whopping $257.40 in the USA.

It's now obvious that Toyota's business model for Australia - combining major Middle East exports with local Camry and Aurion sales - is not sustainable during a global economic downturn with a high Australian dollar.

Ford and Holden already knew, after a failed plan to put the Focus into Broadmeadows for Ford exports around the Asia-Pacific region and the collapse of Commodore shipments to the USA for badging as the Buick G8.

It took a $103 million cash injection from Detroit and Canberra this month to cement a future for the Broadmeadows-built Falcon until 2016, with no guarantees beyond then, and even a long-term commitment by GM Holden to local carmaking comes without a Commodore plan heading to 2020.

Toyota Australia is committed to the Camry and Aurion, and Brand T is building a $350 million engine factory in Melbourne that will open before the end of this year, but it has been rocked by problems beyond its control.

The global financial crisis hit the Middle East hard and that's where Toyota Australia ships the vast majority of the Camrys it builds for export. It was also bleeding money at 2011 export levels.

Production at the Altona factory has fallen from a high of 148,931 cars in 2007 to around 94,000 last year. The best export year was 2008 with 101,688 cars, but that number also fell dramatically to around 60,000 last year.

For 2012, Toyota Australia is only forecasting production of 94,000 cars - despite the arrival of a new Camry, Camry Hybrid and V6 Aurion - and that is nowhere near enough for the current workforce of 3500 people.

The problems at Toyota Australia are disastrous for the 350 people who will lose their jobs, and bad news for anyone in the hundreds of component supply companies that service the three local carmakers.

But it's important to remember that the Camry - just like the Falcon and Commodore - is a world-class family car delivered at a terrific price in Australian showrooms.

It's easy to knock the car industry but it still makes a huge contribution to Australia, not just in taxes but also by providing jobs and inspiration in the most complicated business in the world.