A future in manufacturing: Major issues to be resolved by Australia Pty Ltd

Abstract

When asked for a view for the prospects for the Australian automotive industry’s survival while addressing the Australian British Chamber of Commerce in Melbourne, 11 April 2013, Jac Nasser, current chairman of BHP-Billiton gave a number of concerns that had influenced his change of mind. He cited; an exchange rate at a 30 year high, an above average level of costs in the industry, world-wide excess capacity in the industry, and weak Japanese and Euro Bloc currencies. He suggested that if a major manufacturer was to leave the Australian industry the impact of that on the component supplier infra-structure would be severely damaging resulting in a loss of scale (which is marginal at the moment –authors’ note) and consequently would be the end of automobile manufacturing in Australia. The automotive industry is not alone in facing this problem; years of outsourcing labour intensive activities abdicated responsibility for the future of Australian manufacturing such that in not many years’ time we will be struggling to catch up as Asian manufacturing moves into the high value low volume sectors of high value added industry sectors.