Australia’s sole surviving wheel manufacturer warned there will be unemployment on a scale never seen before when the car industry closes by the end of 2017.
Last week, the Australian Diversification Programme (ADP) was launched in order to help automotive supply chain firms deal with job losses and maximise future opportunities.
ROH Wheels, based in the Adelaide suburb of Woodville North, is the last wheel supplier to the Australian car industry after Ford and Holden began sourcing wheels from China and Taiwan 10 years ago.
Even though ROH has just invested $5.5 million in new machinery and production line changes that will deliver cost savings for the updated Toyota Camry due to go into production early next year, the future of ROH Wheels and its 147 employees is uncertain beyond the end of 2017.
The same economic conditions — a high Australian dollar and cheaper labour in neighbouring countries — that have hamstrung Australia’s three car makers also mean ROH Wheels and manufacturers in other industries cannot export profitably or compete with cheaper imports.
At its peak just 10 years ago, when ROH supplied Holden, Ford, Toyota and Mitsubishi, the company made 1 million wheels per year, or about 5000 a day, and employed 550 workers. Today, production has slipped to 340,000 wheels per year — or 1600 per day — and ROH only supplies Toyota.
“I think we’re in for a shock, this is the tip of the iceberg,” ROH wheels boss Bill Davidson told News Corp.
“I think we’re headed for more closures in non-automotive manufacturing, as well as automotive manufacturing.”
An April 2014 report released by the University of Adelaide called Closing ‘The Motor Vehicle Industry: The Impact On Australia’ estimated almost 200,000 jobs would be lost nationally, including up to 98,500 in Victoria and up to 24,000 in South Australia.
In response to the level of job losses and upheaval in the automotive sector, the Federal Government has launched a $20 million Automotive Diversification Programme (ADP) set to boost Australian automotive suppliers who have been struggling to deal with Toyota, Ford and Holden shuttering Australian manufacturing operations.
The ADP provides successful applicants with grants of between $50 000 to $1 million in repayments for new capital equipment, in order to help them with:
- Research and development activities
- Improving capabilities through re-tooling, including machinery and equipment upgrades
- Early stage commercialisation activities, such as developing new products, prototypes, and the protection of intellectual property
- Pre-production development activities
- Developing export capability.
“It will help firms diversify by supporting R&D, re-tooling, commercialising new ideas, expanding their businesses, or to develop export capabilities by matching business contributions on a one-to-one basis,” South Australian minister for automotive transformation, manufacturing and innovation, Susan Close says.
To apply, your business must be an Australian producer of automotive parts, tools or services, and meet the eligibility criteria.
Round 1 of the ADP is now open. You can apply up until 5:00pm AEST, 11 September 2014. For more information on the ADP and how to apply click here.
Join the conversation