Australia’s four car makers face the threat of disruption for the fourth time in the past year, writes Mike Duffy.
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Assembly lines could be forced to halt unless the nation’s major steel supplier can bring to an end a 15-day strike involving 280 workers.
The dispute, like the three at other component makers that have gone before, involves demands for pay increases plus a bid by the Australian Manufacturing Workers Union to protect worker entitlements.
The leading exhaust system supplier ended its strike only two months ago by agreeing to fund a bank guarantee.
But the AMWU threatens rolling disruptions until all manufacturers agree to lodge holiday and long service pay entitlements in a national provident fund.
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By GlobalDataEmployers are prepared to resist the move strenuously because of the high cost.
Holden, Mitsubishi, Toyota and Ford are only just getting back on track after the last dispute which cost millions of dollars in lost production.
With 70 enterprise bargaining agreements due for negotiation this year in the component sector, the impact of rolling stoppages could be disastrous.
Australia has used its previous excellent industrial relations record as a major selling point to attract investment from parent companies and to secure lucrative export orders.
GM affiliate Holden and Mitsubishi report they hold sufficient steel for vehicle production to continue for only for another week.
Ford and Toyota are yet to reveal how long they can keep producing cars.
Car makers are worried that if any component company runs out of steel and cannot deliver to assembly lines, the industry will grind to a halt.
Unions are using their bargaining power to press for an outcome which would cost Australia’s manufacturing sector dearly.
The threat of continual disruptions will affect every manufacturer.
Mitsubishi Motors Corp of Japan only recently agreed to invest almost $A1 billion to build a replacement Magna/Diamante in 2005 and a new luxury big car, due for release in 2006 in Australia and the US.
Holden wants to export 20,000 Monaro Coupes to the US and a smaller number to other markets including Britain.
This would require a third shift to be introduced at its Adelaide assembly plant involving hiring several hundred additional workers. But Holden refuses to make such a move until there is industrial peace.
Part of the Mitsubishi expansion, which has attracted $A85 million in government grants, will create hundreds of new jobs.
But Mitsubishi may be unwilling to hire unless the Federal Government can find a solution to the union’s push for entitlement safeguards.
