Feb 11, 2014

Ask the economists: will the loss of car-making drive us to recession?

With Toyota announcing it will cease Australian operations, the age of car manufacturing in Australia is over. Crikey media writer Myriam Robin and SmartCompany journalist Yolanda Redrup ask the experts what the impacts will be.

Labor (and labour) figures accuse the Abbott government of callous disregard for workers and the economy after Toyota became the last car manufacturer in Australia to declare it would shut up shop, amid warnings of a looming economic recession.


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12 thoughts on “Ask the economists: will the loss of car-making drive us to recession?

  1. Mark out West

    Typical MeatHead from the ACCI equating the $30B as wasted, on Philip Toner, department of political economy at the University of Sydney figures $1.5B equated to $21B in Terms of Trade exports. So $30b would equate to $420B in exports.

    Still as far a Bernard & Co are concerned the Magic pudding economy will Magic up new high skilled jobs or we could all become footmen for the Chinese billionaires that have their holiday homes here

  2. AR

    I love the smell of Schadenfreude.. anytime from well cossetted rightards.

  3. K.D. Afford

    Our rush to lower tariffs and have a world trade status has cost us dearly. “No Man in hard to fit,” was the advert for Fletcher Jones in SA, what of Blundstone boots? There must be hundreds of small companies across Australia that have failed as the doors opened wide… the car industry is the same…but something more sinister happened there, it was the failure to see what is happening to the world with peak oil – no bullshit, we are at the end of cheap oil, don’t let the Merchants of Doubt tell you otherwise ( Read Snake Oil by Richard Heinberg) – big cars still crowd the little ones off the road, there was a lack of exciting design and development of a really efficient small car to carry that ONE person around, or mum and the kids to school. We had to be seen in big FO 4WD’s or buy a stupid flash, brand name, from Europe to swan around in.
    We are at the end of growth, we cannot manufacture our way out of it, and now the only thing to look forward to is the return to 2 billion people on the planet!

  4. Corey Ander

    These analysts have very diverse views and they can’t all be right so we need some analysis of the analyses.

    It seems to be pretty clear that the numbers of workers affected will be in the range 40-50,000 when the component manufacturers are added to the mix. Add in their families and the number of Australians affected is more likely to closer to 100-150,000.

    All of those people risk being consigned to scrap heap. So without a high level of support to ensure that they avoid the despair of unemployment and being unwanted by our society this event will add to the misery of our underclass.

    Of course, there will be jobs available for the conservative aparatchiks needed to crank up the attacks on the poor and unemployed which will soon be wheeled out to dog whistle to the swinging voters.

  5. Wakerley4154

    Most academics have attacked support for the car industry for many years. AFR (Alan Woods et al) were similar. Bit late for supporters to come out of the woodwork now. The game is over. As observed today elsewhere, most of the ‘squealers’ don’t buy Aussie made cars anyway! And don’t forget how the Whitlam Govt wiped out the clothing industry in regional centres. Could not have cared less. Just saying…chickens come home to roost!

  6. klewso

    Aren’t most economists masters of predicting the past?

  7. Hamis Hill

    Well, here is some more dangerous and alarmist commentary.
    When you have an economy now, with the demise of manufacturing, entirely built upon property speculation in already constructed housing then maybe, just maybe, some “investors” will become a little alarmed and alert to suffering the same results as the GFC as they see their property prices tank.
    Unlike the present government and its “supporters”, overseas investors in particular, understand why Australia escaped the GFC and realise just what an economic danger the present government and its “supporters”, who deny the GFC altogether, present to their “investments”.
    The clever ones will short sell their properties, take the money and run.
    The slow ones will find out too late and in the “Inevitable Abbott Recession” will see their several investment properties crash in price, while the fast ones who got out early will come back when it is all over and snap up properties for a song.
    If the “Goanna” were still alive he’d be doing the same thing.
    The “market sentiment” among the greed is good property speculators, is always a little bit wonky; can they really believe in the “money for nothing” principle of theirs, when they last “industry” standing in the Abbott economic atrocity?
    having wrecked all the other industries by preying upon their employees with unsustainable housing debt.
    Who knows once this inevitable economic adjustment is over and Australians are freed from a crippling $I.75 Trillion mortgage debt, the auto industry might come back, wages and the dollar will be low, and Australia will have recovered from its unsustainable mortgage debt orgy in the same way that the US has.
    Go on “experts” mouth the words, $1.75 Trillion dollar housing debt and unsustainably high interest rates, with the mortgage holders losing their jobs?
    Dangerous and alarming truth?
    The Howard mortgage debt orgy destroyed manufacturing, ask Ford, Holden and Toyota, they are not stupid.
    How is that for some dangerous and alarmist commentary, to scare the horses, or is crazy Tony doing that all by himself?
    The various, assorted, bastard children of Adam Smith might go back and read their father’s words and then consider what they did to stop the “Inevitable Abbott Recession”?
    The property speculation market sentiment just needs a little push into panic, sorry “experts” but that is a fact.
    Enjoy the ride, you built it.

  8. Hamis Hill

    And of course a Royal Commission into the construction industry, the last industry standing, will not have a dangerous and alarming effect on investor sentiment?
    Of course not!

  9. klewso

    Didn’t the GFC start early last September?

  10. Itsarort

    I’m not sure about Shane Oliver’s opinion; you might as well ask the fox how the hen house should be run…

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