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Toyota’s 2500 factory workers will vote next week on the redundancy packages they will receive when the Altona facility closes at the end of 2017 -- as the car maker repeated its pledge to “go the full distance”. Toyota is the last of the three car makers to negotiate the terms of its separation packages but the union has described it as a “fair deal”.
“We’ve been in negotiations for some time about the closure arrangements and now it’s matter of going through the detail of what it all means,” said Dave Smith, the national secretary of the vehicles division of the Australian Manufacturing Workers Union. I’m comfortable with the deal being put to members but ultimately the members will make a decision on whether or not it’s a fair deal.”
Newly appointed Toyota Australia president, Dave Buttner, only the second Australian to lead the company in more than 50 years and the first since 1992, reaffirmed its commitment to building cars all the way to the planned closure date. “We are 100 per cent committed to building cars through to the end of 2017 and we’re taking unprecedented steps to ensure that happens,” said Mr Buttner, who was promoted to the president’s role on May 1 after 27 years with the company.
Ford, Holden and Toyota have put aside their rivalries to work together to keep the network of local parts suppliers afloat so they can all reach their end-of-production targets. Ford is due to close its Broadmeadows and Geelong factories in October 2016. Holden’s Port Melbourne engine factory is due to shut some time in 2016 and the Elizabeth car assembly line will close in the second half of 2017. Toyota says it will build cars all the way to December 2017.
In a wide-ranging interview almost 100 days since global Toyota boss Akio Toyoda announced the factory closure in person at the Altona site, Mr Buttner revealed that the company had stopped the production line every fortnight since then to address workers.
“We have duty of care to make this to most respectful transition to a sales and distribution company in the history of Australia,” said Mr Buttner. “We’ve tried to have the most open communication process we’ve ever had as a company. When there’s uncertainty you can put out all the pieces of paper in the world … but people need to hear from a human being.”
Mr Buttner said 15 per cent of the workforce is over 55 years of age and may use the redundancy payout as a chance to take early retirement. But the average years of service for all Altona workers is 15 years. About 20 per cent of workers are aged under 33, but the majority (65 per cent) are in the 34 to 54 age bracket. “They’re still dealing with mortgages and raising kids, so for them, finding another job is critical,” said Mr Buttner.
“To do that we have to treat everyone as an individual, we have to understand the phase of their career and the phase of the life that they’re at and we will sit with every employee and develop an individual development plan.”
Toyota is in the process of establishing language translation services and resume writing services for all workers, as well as appointing career advisors. Meanwhile, it appears the future of Toyota’s 600 or so white-collar office workers is also under review and it is turning into a Sydney versus Melbourne battle.
Toyota Australia’s head office is in Port Melbourne has 326 staff while the sales and marketing office in Caringbah, a seaside suburb south of Sydney, has 309 employees. Mr Buttner would not be drawn on which office would close, or if both would remain open. But he said a decision would be made by the end of this year to give workers at both locations ample notice.
Mr Buttner also warned that Toyota Australia is expected to post a significant financial loss after Holden and Ford this week announced losses of $553.8 million and $267 million respectively. Toyota Australia’s financials won’t be made public until July because the company works to the Japanese financial year, which ends on March 31.
“We will report by the end of July,” said Mr Buttner. “Given the fact we are also going through the same thing as our competitors then there will be some elements in there that won’t surprise many people.” Toyota’s redundancy package has taken longer to prepare because the company “never gave up hope” of coming up with a survival plan.
Mr Buttner revealed that the company had made it almost half way to its ambitious cost-savings target to slash $3800 from the cost of building a car, but in the end the plans were foiled by factors beyond Toyota’s control.
“We never gave up in fighting for our manufacturing future until the day the closure was announced,” said Mr Buttner. “We reached our savings targets in the first two years. Toyota (Japan) even sent representatives from other factories to see how we did it,” said Mr Buttner.
“But in the end there were too many ‘uncontrollables’ that just meant it was not viable to continue (manufacturing). That’s why for our employees the announcement was very difficult because we had worked so hard to reach our first two (of five cost-saving) targets.”
When asked if Toyota could survive if Ford and Holden were too close early, Mr Buttner said: “We just have to watch what’s happening. I don’t understand what their mid and long term plans are, we just have to be prepared for every contingency … we have to be prepared for any eventuality.”