Toyota’s tent joins Ford and GM in the boot.


Courtesy Cartoonstock

Courtesy Cartoonstock

As a little kid, the milkman used to deliver from a horse drawn cart. Even then, in the mid fifties it was outmoded, almost rustic, but endlessly engaging for a 5 year old boy.

Much later, I was the marketing director of a NSW dairy co-operative as it wrestled with the inevitability of deregulation. I was continually reminded by those with vested interests that there should be no change, that the regulation was a good thing, that home delivery of milk was what had made us great, even though customers had voted with their feet.  It sometimes sounded like that old milkman of my childhood explaining why he still had a horse when everyone else had trucks.

Yesterday listening to the various political blame allocations for the closure of Toyota, on the heels of the announcements by Ford and Holden, it was groundhog day, again.

Facts, and a dispassionate view of the whole picture played no part. Just like the farmer  Directors of that dairy company, everyone else was wrong, they alone had the insights necessary to keep the boat from sinking, disaster from arriving, and the black forces from Hades consuming us.

Toyota has joined Ford and Holden in folding their tents, along with much of the Australian food processing industry.

Lets have a look at some of the underlying factors obscured by the smoke and mirrors of self interest:

    1. If we are so committed to an Australian car making industry, why do only 20% of us drive one made here? Some more heresy: A  significant proportion of those 20% are company supplied cars, where the driver has no choice, and if they did, would that 20% be 10%? Death of an industry!! Who cares, obviously not enough of us. It is just like the food processing industry, which I would argue is just a touch more important,  killed off by lack of scale, high $A, global supply chains, the move to low cost manufacturing locations, a history of self important and short sighted management, and political and bureaucratic hubris.
    2. 35,000 jobs will disappear!! Woe is me, the sky is falling! That number, not to make light of the distress of those who find themselves unemployed, and perhaps unemployable,  is less than 0 .3% of employment. Anyway, why is 35,000 the number? Toyota has 600 people in their Sydney offices, none of them are going.
    3. 25 years ago manufacturing was 14% of jobs, now it is 8%, it was 12% of GDP, and now is 6.5%. The vast majority of people displaced by these changes have found new jobs in industries that barely existed 25 years ago, why not again? Anyway, 350,000 people change jobs every month, every month! Another 35,000 over 4 years is a drop in the bucket, again not to be unfeeling towards those who struggle.
    4. It could be a financial bonanza for the government. Instead of supporting a corpse, pumping in life support dollars, they can be just counting the revenues from tarriffs as imports increase 20%, they might even remove the “luxury” tax designed to “save” the local industry,  now there is no local industry left to save. However, I doubt it, as the “luxury” tax raises$ 1.8 billion. When the previous government proposed changes to the regime to capture tax lost to corporate salary  packaging of cars, the current government, then opposition, in a dose of real hypocrisy opposed it, but I sense a change of mind now.

It would be much better if the energy spent looking backwards and allocating blame was spent looking forwards, and building for the future.




About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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2 Responses to Toyota’s tent joins Ford and GM in the boot.

  1. strategyaudit says:

    Long time ago now, we are no longer so young and care-free!!

  2. Richard de Vos says:

    Aah. Dairy days.

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