Holden’s 2017 Elizabeth Plant Closure Spurs Fears Of Aftermath
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When Holden makes its exit from Australian production in 2017, what will happen to Holden employees who work at the Elizabeth plant? According to testimony in an Australian Senate inquiry, some believe the rate of domestic violence, crime, and suicide will increase in Adelaide.
According to ABC News Online, Senator Penny Wright claims the Green party has set up this unprecedented inquiry as the closure of Holden was unprecedented for South Australia. “It will be the closure of an entire industry and there will be significant long-term impacts, both social and economic, if we don’t get the transition right. It’s really important that Australians understand just how difficult it is for some people to keep their heads above water, how desperate the situation can be for them and how government policies can actually make that situation worse. If we don’t make the transition we’ve heard there will be increases in crime, there will be increases in domestic violence, there will be increases in mental health issues and even suicides because the flow-on effects will be so significant.”
Reverend Peter Sandeman, a member of the State Government’s Automotive Transformation Taskforce, told the inquiry there was only a short window of opportunity to train workers in other areas. “If young people don’t see a chance of getting employment at the end of school, why stay in school? If young people don’t see by being active and positive citizens in Australia, they are not going to get a fair go, well why be active, why be positive?”
Sandeman also believes that federal and state funding allocated to help Holden workers move to other jobs was not enough: “We’re talking about the funds that the Federal Government and the State Government and Holdens and Toyota are jointly contributing to help the transformation of businesses and workers into the new post Holden arrangement … There is about $160 million dollars available for that. It’s not enough, we need more.”
Meanwhile, current Holden workers are getting anxious about their future post-closure. Ross Womersley of the South Australian Council of Social Service said, “Already I think we are seeing people who are losing their confidence because they anticipate the closure of Holden and that in turn drives business out of the place rather than into an area like this.”
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This closure issue extends far beyond Holden and Toyota. There is the entire component industry that will cause bankruptcies. Educational institutions training engineers will be impacted. With reduced buying power all industries will suffer. Then their currency exchange rates will dive making imported vehicles more expensive. Smart young Australian will go “walkabout” and not bother returning home leading to a brain-drain. How the Australian government can’t see the erosion to their entire economy from a ripple effect is beyond me.
Most industrial countries in the world protect their auto industry in one fashion or another, demanding local ownership percentages (China), unique safety or emission requirements (USA), local plants (most of Europe) and Japan has a host of classifications on engine size, width restrictions, maintenance requirements and many other subtle laws.
Much of the industrial maturity in 1940 that helped Australia be innovative during WWII came from the auto industry and convinced the country that it needed its own car after the war. Think of the strategic industrial security that falls away with the loss of all these engineering and industrial skills.
Ostriches bury their heads in the sands. Have kangaroos started the same practice?
It is pretty easy to show what the results “can be” in this kind of socioeconomic upheaval. Just look at my home town of Flint, MI. I do not mean just from the crime statistic standpoint, but look at the overall economic, public works investments and other attempts to bring in new industry and jobs, throughout a 30 year downward spiral. From training program after training program, massive college investments (GMI/Kettering, U of M Flint, Mott Community College, Baker College, etc) and even building a theme park (AutoWorld) and tearing down blocks and blocks of historic downtown structures to build a hotel and a pair of malls that all failed. It went from one of the best places in America to live in, to one of the most violent and dangerous cities in America; in just one generation.
Our auto industry was not going to survive without significant exports. In Holden’s case exports to its largest market, the Middle East was cut back significantly by GM some time ago. The engineering and manufacturing wind down also started prior to the GM bankruptcy.
The Federal government could see all this and eventually pulled the plug on “co-investment” entirely. As much as it saddens myself and many others to lose Holden’s manufacturing and engineering no country should let itself be conned by a multi-national into handing over taxpayer money, when over a given period of time that country’s economy is going to receive less and less economically in return.
In regards to socio-economic effects this is going to hurt Adelaide for a while but you need to remember that our society is very different to yours. We are more similar to many Western European countries and Canada in that we do not have or allow the sort of social inequality that you guys experience. We also have heavy restrictions on gun ownership so I can’t see the area own Elizabeth turning into some big ghetto.
In time the auto industry may return. Many parts suppliers will survive but if it does return it will probably be something similar to Tesla as putting a vehicle like that together is less complex due to the fact there is less parts like engines, gearboxes etc involved.
Mate i live in Adelaide and have been to Elizabeth to visit my cousins on numerous occasions, TURN INTO A GHETTO? IT #$%@ING IS ONE ALL READY. Social inequality??? mate Elizabeth is all government housing and one of the biggest hell holes in oz with assaults, rapes, drugs, theft, auto theft, burglaries, armed robberies, murders etc etc etc all well over the averages for any other place in Adelaide, that and four or five local impact studies have estimated between 5000 -15,000 flow on job losses from areas not directly employed by Holden in parts supply, paint, transport, shops etc etc etc. Do me a favor and have some clue as to what the &%@# your talking about before making such a post.