Ms
TIERNEY (Western Victoria) — My question is to the Minister for Industry
and Trade. Can the minister please outline to the house the effects of the
closure of the Mitsubishi manufacturing plant in Adelaide on the Victorian
automotive industry?
Hon.
T. C. THEOPHANOUS (Minister for Industry and Trade) — I thank the member
for her question and for her ongoing interest in the automotive industry.
Yesterday Mitsubishi Japan announced that the Mitsubishi car
assembly plant in Adelaide will cease production at the end of March this year.
I received a call earlier in the day from Robert McEniry, the Australian chief
executive officer (CEO) of Mitsubishi, to inform me that this was taking place. He
informed me that 600 staff would leave the company at the end of March, but he
also assured me that those staff would receive full entitlements. He indicated
that a further 330 staff would leave over the subsequent 12 months, and again
that those staff would receive full entitlements. He also indicated that he was
putting in place with the assistance of the South Australian government a system
of assistance for the affected staff, including finding other potential
employment.
I want to echo the comments of the South Australian Premier,
Mike Rann, in saying that the priority does have to be supporting these workers
and their families. in particular ensuring they are able to find other
employment that will allow them to continue to play a useful part in the
community.
I might say that the CEO of Mitsubishi did inform me that the
production of Mitsubishi cars in Australia now represents about 2 per cent of
Australian production of cars, which is an indication of just how low production
levels had fallen with respect to Mitsubishi cars. He was indicating that it is
not viable at this time.
Let me just make some comments about the impact on Victorian
supply chain companies. The first thing to say is that this government has
supported the automotive industry and has been a champion of that industry over
a protracted period of time. It is all very well for David Davis to come in here
and to try to make cheap points about the Victorian industry, but he has
absolutely no idea about the Victorian industry. He has never taken an interest
in it. He has been absent on duty from anything to do with that industry, and
no-one in the industry takes him seriously.
For those members who are genuinely interested, let me just go
through the effect on the Victorian industry. The majority of Victorian
automotive supply chain manufacturers provide parts and components for Ford,
Holden and Toyota as well as in some cases for Mitsubishi. The total annual
value of Victorian-made automotive components sold to Ford, Holden, Mitsubishi
and Toyota was $2.9 billion in 2006 — a significant amount. The value of
Victorian-made components sold to Mitsubishi in 2006 was $140 million — in
other words, Mitsubishi’s share of the $2.9 billion was $140 million, which is
less than 5 per cent of the overall component manufacture out of this state.
Having said that, the complexity here is whether the fact that
Mitsubishi is going to vacate the market will mean an increase in production by
other vehicle manufacturers. That is our aim — that is, to try to ensure that
that occurs and that any slack is taken up.
It is true to say that the Victorian automotive industry has
gone through a restructure and faces a number of challenges, as does the
Australian industry. The most important of these challenges is the declining
propensity of Australians to purchase Australian cars. We now have a
circumstance where 19 per cent of overall car sales are of Australian cars. That
declining proportion does have and has had an effect on the automotive industry.
However, what the Victorian and the Australian governments have attempted to do
is take up that slack in other ways, particularly through exports. We are now in
a position where we can say that about 50 per cent of total production is
dedicated to exports. That has been as a result of deliberate strategies, and I
will mention three of them. They are the Toyota Camry strategy, which is
delivering a large number of exports into the Middle East; the Pontiac VE
Commodore strategy, which is exporting Commodores disguised as Pontiacs into the
United States of America; and a number of other export initiatives that are
taking place.
I finish by saying that one of the indicators of just how this
industry is changing is that if you look at the industry today, you see 4000
people employed as designers and engineers who are designing and engineering
products which are not necessarily made in this country. That 4000 is a larger
number of employees than the number employed in any of the production plants
that actually make cars. The industry is restructuring and changing. However, in
Victoria it is very resilient, and we expect there will be minimal impact on the
Victorian car industry as a result of Mitsubishi closing down.