A domino effect of job destruction is set to hit Australia if the lay-offs in the car industry continue, The Federation of Automotive Products Manufacturers (FAPM) has warned.
The rate of vehicle production in Australia is dropping, with projections of 215,000 vehicles produced in Australia for 2013, contrasted with the 407,000 produced in 2004.
The FAPM stated that for every direct job generated in the car industry, four-to-six positions in ancillary organisations such as automotive part manufacturers are created. If the current rate of termination continues, it is estimated 300,000 jobs will be wiped-out in the next five years.
“Make no mistake - people must realise that there are hundreds of thousands of further jobs that will be lost in Australia unless critical steps are taken now to alleviate the current crisis,” Richard Reilly, CEO of FAPM, said.
“Every car we make has 30,000 individual parts. The futures of all the people who make these components, right across the country, are in limbo right now,” Reilly said.
“In absolute terms, the sector has grown but its importance to our overall economic prosperity has declined dramatically,” Christopher Tipler, author of Corpus RIOS, told HC.
Tipler highlighted reasons in addition to the domino effect as to why a vibrant manufacturing sector is necessary in Australia.
In order for a strong defense force, basic weaponry must be developed here, as well as skilled professionals who can maintain the more sophisticated, imported equipment. “This is a threshold here; below a certain point we will not be able to maintain the required critical mass in heavy engineering, metal fabrication, electronics and other fields,” Tipler said.
The expense of importation is another concern for Tipler. The price of the vast array of imports Australians enjoy has risen, and while mineral exportation currently affords this, the mining boom may have peaked. “Broadening our export base around manufactured products is the only answer here, unless we are prepared to live with a permanent reduction in our standard of living.”
Education and skills are straddled by manufacturing. Tipler highlights the diverse range of abilities that are necessary in the industry, and that through acquiring the required skills young people are given a “truly interesting and worthwhile alternative to spending time on Facebook
Finally, Tipler stated that the dignity and satisfaction that comes from making things is a reason in-and-of itself to support the manufacturing industry in Australia.
Tipler feels that a major problem is the lack of an effective industry policy in Australia. “The nub of our industry policy problem is that it is approached by policy makers almost purely from a theoretical economic perspective when it is largely a commercial matter,” he stated.
Tipler offered the government of Bavaria as a prime example of successful promotion of the manufacturing sector.
He highlighted Bavaria’s emphasis on its long history of craftsmanship, commitment to “family” ownership in which owner-managers rub shoulders with workers, long term vision, selling of niche products, innovative management approaches with cautious financial structuring and close work with universities.
Additionally, Bavaria features a ‘Job for life’ approach to employment, and harmonious industrial relations in which unions and business owners work together instead of at odds with one another.
Tipler feels the Australian Government can learn a lot from Bavaria. One Bavarian policy – Kuzarbeit – that Tipler highlighted involves the subsidising of companies that cut down on hours instead of staff.
Although governments can intervene, a heavy weight rests on the shoulders of HR to help organisations through this painful period. “HR professionals have to become the chief 'storytellers' for their organisations. They have to help the transitions by understanding the strategy of their business, translating it into a story that makes sense to employees,” Tipler said.
“In other words, they must play a high level role and not get stuck in tactical stuff such as negotiating with unions and outplacement. A much broader HR lesson has to do with imagination and innovation … how can HR professionals foster a culture of more positive attitudes and risk taking?”