The body shop at Altona

The body shop at Altona

Toyota Australia is cutting 350 jobs, citing unprecedented pressure on its operations.

The head of the unit, Max Yasuda, said the cutback at its Altona, South Australia, Camry plant was necessary given the current and anticipated economic conditions.

He said: “Toyota Australia is facing severe operating conditions resulting in unsustainable financial returns due to factors including the strong Australian currency, reduced cost competitiveness and volume decline, especially in export markets."

Toyota exports about 70% of its Australian production offshore, mostly to the Middle East and New Zealand.

The cuts represent about 7.5% of the plant's workforce. Yasuda said that demand for vehicles had failed to recover from the global downturn, with production slipping 36% since 2007, when the plant produced 149,000 cars. It is expected to make just 95,000 this year.

Less than a year ago Toyota scaled back production by 20%, putting staff on half-shifts, after an earthquake and tsunami devastated Japan.

Local auto industry publication GoAuto noted the factory’s 3,300-strong workforce late last year won a 13% pay rise over 42 months after a long-running dispute, including rolling strikes.

Yasuda warned during the height of the bitter industrial action in September that the dispute could jeopardise the company’s export programme, saying the local operation was under severe competitive disadvantage due to currency, high local costs and reduced volumes, GoAuto added.

Ford cut 240 Australian jobs following the tsunami last March, also citing a slump in demand.

Australia’s manufacturing minister Kim Carr said the latest layoffs were an "unfortunate consequence of the high dollar and global uncertainty. The harsh reality of the continuing strong Australian dollar means that Toyota's export markets are under severe pressure and they are struggling to sell enough cars to keep the Altona line at full capacity."

The government has previously extended a multi-billion-dollar lifeline to the country's auto industry at the height of the global financial crisis. The industry directly employs some 46,000 people in Australia and supports another 230,000 jobs.

GoAuto said Ford and Holden had both sought grants and other help from federal and state governments to help secure investment in future models. Holden parent company General Motors had warned Carr that closing its car plant in Elizabeth, South Australia, was an option while Ford production of its locally developed Falcon had been secured only until 2016, raising questions over the long-term future of its Victorian factories in Geelong and Broadmeadows.