According to a forecasting model presented by the Premier of the state of South Australia, Jay Weatherill, the closure of Holden manufacturing operations in the state will result in 1,500 jobs in 2016 and a further 4,600 jobs in 2017.
Growth in the jobs section isn’t expected to return to normal levels for a period of seven years, and “the strongest effect will be felt in 2017-18, beyond the forward estimates”.
The loss of jobs is also expected to negatively impact the state’s budget, reducing it by $303 million thanks to a drop in expected GST revenue over a period of four years. GST, or Goods and Services Tax, is collected from retail sales across Australia and then divided among the states. The closure of GM manufacturing in Australia is thought to deliver a direct A$14.2 billion tax hit starting in 2017 as property sales and consumer activity slump.
In other words, Holden’s closure will create a long-term problem for the state of South Australia. According to various media reports, the has not been able to adequately prepare for and is struggling to find an answer to the impending trouble.
The revelations come just a few months ahead of the 2014 South Australian state election, where the Labor party’s Weatherill will square off against Steven Marshall from the Liberal party. As such, it’s highly likely that there will be much politicking over the outcome of the report brought forth by Weatherill, who was blamed for reportedly withholding it by a couple of days. But at the core of it, South Australia seems to be on the verge of entering a decade-long period of a labor recession that’s amplified by fragile economy with a scarce amount of funds for various public services.
Comments
A shame.
It was decades ago, but when GM pulled it’s Fisher Body plant, out of our city… it depressed the local economy for years. That’s when a dedicated group of city father’s, (and mother’s), got together and planned a diversified economy for our area. It took years, to decades, to pull off, but now we can pretty much weather most economic downturns, including the last one.
I hope the same for you Australia… My best wishes.
We used to have a Fisher Body plant here in Columbus Ohio, but in closed a long time ago. It was taken over by the state of Ohio last year and is now a casino. It is sad that how this country is falling apart, not only economically, but socially.
Could you please build me one last Ute with V8 and manual tranny, please, before you close the doors?
They are just going through what we went though here. In the mid west here we felt the fact we were no longer a isolated country with cheaper imports and unions that would not budge to compete. Also we had local governments that were reacting too late to do anything as they were mostly supported by the unions that threatened to pull their support if the government did anything against them to keep the companies.
Today were are back moving slowly in the right direction. While some projects are a waste like a Casino in a plant the local governments and unions have finally come around and saved a lot of jobs at places like Lordstown.
Building cars is all about making money and if there are little to no profits to generate dividens then the company leaders are removed or investment in the company drops. Companies are there to make money and provide a return to investors. This is the cold reality that many fail to see or want to understand but this is why they get into business. Companies are not charities.
Things can change down under once they learn and work to compete on a global scale. Just look at the pricing and limits to bring the SS here and it is not really that much better anywhere else. With the way cars are built today they can build the same car anywhere in the world just as well so where ever they can do it with the lowest cost they will. This is no longer plant vs. plant in one country this is plant vs. plant globally. Transportation and communications has made it possible to build anything nearly anywhere and that is what we are all faced with.
The difference is that in the US your entire auto industry didn’t shut down. This is what we are facing here. Our auto industry is small and the supply chain supplying Ford and Holden will start the process of winding down very soon. If Toyota decide to pull out and no buyer can be found for any of the currently operating car plants then its all over in the short-medium term at least. Most of the suppliers will collapse which will make it near impossible to start building cars again. But who knows what will happen in the long term. I think 3D printing/additive manufacturing is going to be a massive disruptor and has the potential to re localise manufacturing in years to come.
I do wonder if other car manufacturing nations in the developed world are watching developments closely in Australia, particularly the government’s response. You maybe surprised to know that in 2012 Sweden actually produced 47k less motor vehicles than Australia. I’d guess the numbers for 2013 maybe similar. Their auto industry is much more heavily subsidised from what I understand. Watch this space.
What you say is true Michael. Our entire auto industry didn’t collapse when a factory shuts down, but in many communities that factory is the one and only job source. This is devastating in its own way. The community can lapse into a ghost town or reinvent itself. There are many communities that have experienced this dilemma since I have been born. A huge number of auto manufacturers that have disappeared since autos began in this country… Studebaker, Desoto, Auburn, Rio, the list goes on and on.
Don’t worry, auto manufacturing will come back to Australia… It’s only a matter of time. Like every other 1st world country, you need autos, and you have an educated populace with industrial know how. It’s only a matter of time. Just expect the Spector of robotized automation to lower the number of workers.
I’d hope so one day but it’s all over at the moment. Toyota made their announcement today. Akio Toyoda flew to Melbourne from Japan to personally address workers. Only the second major manufacturing plant that Toyota has closed in the world. The first one was the joint facility with GM that Tesla now occupy in California.
Well I expected the Toyota note and it is here.
I feel bad for the people there as I have seen the same thing here in Ohio where much of the Industry left in the 70’s and has never come back. Well at least the air is cleaner but no job’s in MFG anymore.
I would think many in Australia are now concerned for production of many other good there being stopped. With the way things can be imported anymore if they can do it cheaper else where they will. The government needs to get control of this or they will end up like Youngstown Ohio.
Note Youngstown is like out Mad Max area. People go in but few come out. LOL! No kidding the crime is horrible and with the union mentality there few companies want to invest there. At least near by Lordstown UAW has learned to work with GM and did save those jobs but others in the area still have a lot to learn.