Many Australians are not happy that its automotive manufacturing industry is escaping to other countries, and for good reason: jobs and national pride, among other things, are at stake. Ontario, Canada’s Financial Post feels that the same thing can happen to them.
“Demise of Australia’s auto industry a ‘cautionary tale’ for Canada” shows parallels between Australia’s market conditions and how the Big Three has shifted production to Mexico, which has much lower overhead. When General Motors’ (and Chrysler’s) production commitments expire in 2017, what’s next?
“I think it (the Australian car-making industry’s fall) is a cautionary tale for Canada,” says chief economist at blue-collar workers’ union Unifor, Jim Stanford.
Australia’s problems really began over 30 years ago when the country eliminated vehicle tariffs and introduced more foreign competition, especially from Asia. Next came a strong Australian dollar and then the government’s decision to end subsidies for the auto industry.
However, the comparison is not quite an apples to apples item: Canada has the U.S. as its neighbor to feed its industry, while Australia is isolated from all surrounding countries.
As Australian production continues to wind down (Ford for 2016, GM’s Holden for 2017), production from other countries like Mexico and Argentina have picked up, accounting for almost 8,000 new-car sales this year, according to GoAuto.com.au. And in a change from production over 40 years ago, no Canadian vehicles are imported to Australia.