Why Toyota is next to go | comment

But workers and the rest of the industry will face a lengthy wait before the final call to shut Toyota’s Altona factory comes from head office in Japan. A formal decision from Toyota may not come until the middle of next year, even though it is as inevitable as Holden’s factory shutdown.

The Federal Court’s decision to block Toyota from asking its factory workers to vote tomorrow (Friday) on changes to shift flexibility and overtime bonuses means that it is now highly likely that the company will not be able to meet its stringent cost-reduction targets that are key to securing investment in the 2018 Camry.

It had been trying to slash $3800 from the cost of each car it builds, or about 15 per cent of the production cost. The changes to the workplace agreement -- as well as supplier cost reductions -- were key to Toyota Australia achieving its targets.

But the lack of any adjustment to Toyota’s workplace agreement means the entire Australian car industry is likely to grind to a halt after Ford’s factory shutdowns in 2016, Holden’s closures in 2017 and a likely end to Toyota’s operations in 2018, when the current Camry ends its run.

Toyota and the unions appeared in court twice today (Thursday) after the judge deemed in the first hearing that it was illegal for the company to seek an amendment to the current workplace agreement.

According to the interpretation of the Federal Court, Toyota could not commence new negotiations until after the current workplace contract expires in March 2015. However, Toyota challenged this because in the second half of the wording of the regulation it says “unless there is worker consent”.

Toyota had interpreted that asking workers to vote was a form of consent, and that if 50 per cent plus one worker voted yes to the changes, then they would be enforced. But even before today’s Federal Court decision, unions had foreshadowed a “no” vote so the result is likely the same.

It is difficult to understand what Toyota workers and the unions disliked so much about the new deal. Holden workers had to agree to a three-year wage freeze; Toyota workers were still entitled to two pay rises next year (3.25 per cent in April and 2 per cent in September).

A statement from Toyota said: “Action in the Federal Court has today resulted in Toyota Australia not being able to proceed with its planned employee vote on the proposed changes to its Workplace Agreement terms and conditions.

“The move comes after four employees lodged a complaint with the Federal Court that Toyota Australia could not vary its agreement until it has expired in March 2015.

“Justice Bromberg today supported the four employees and directed Toyota Australia to stop any action it was taking to vary the Workplace Agreement, including the employee vote scheduled for this Friday 13 December 2013."

Toyota Australia President and CEO Max Yasuda said: “We believe that we are within our rights to vary our Workplace Agreement provided the majority of our employees support the changes through a formal vote. The company is doing everything that it can to secure the future for our employees and their families.

“GM Holden’s planned closure in 2017 will put our manufacturing operations and the local supplier network under unprecedented pressure, so it is now more important than ever before that we make urgent changes.

“A decision will be made next year on the next generation Camry and export program and we need to take urgent action if we want to stay at the negotiating table for future investments.

“The proposed changes were designed to remove outdated and uncompetitive terms and conditions that make it difficult to compete with other Toyota plants throughout the world.”

Toyota Australia said it may appeal the decision. But in reality, the Federal Court has given Toyota just the excuse it needs to shut its loss-making Camry factory. Here’s hoping Toyota factory workers are not put through the same misery and months of uncertainty endured by Holden factory workers.

This reporter is on Twitter: @JoshuaDowling