The majority of Toyota Australia’s 3300 production workers are continuing industrial action today, ignoring grave warnings from the company’s CEO about the potential impact on future exports and Australian production.
Today marks the second day employees at Toyota’s Altona production plant in Melbourne have taken strike action, following the first 24-hour strike on September 2.
Australian Manufacturing Workers’ Union spokesman David Smith today admitted it would take “something extraordinary” to stop the planned action continuing tomorrow as well.
Toyota Australia’s Laura Hill confirmed only around 400 employees had turned up to work this morning, and she said they would be given “meaningful work” to do.
Ms Hill confirmed this might include training or maintenance work, and potentially some partial production work, however she insisted that with the majority of the workforce offsite, “we won’t be building any cars today”.
Those 400-odd employees were subject to a fierce attack in the form of a letter from militant strikers today. The letter, published this morning on the website of Fairfax Radio Network’s Melbourne station 3AW, says every employee who chose to work rather than strike was a “FUCKING SCAB”. (Apologies, but that’s exactly how they worded it, right down to the capital letters and the underline.)
“You are the lowest of the low we know who you are we know what car you drive we know where you live PAYBACK-IS-A-BITCH 3 FOLD,” the letter continues, in a neat collision of illiteracy and aggression.
The letter continues: “SCABS DO NOT GO AGAINST THE MAJORITY.” (Obviously there is some confusion here – going against the striking majority is exactly what scabs do…)
The AMWU says it is not responsible for the letter and does not condone its message.
Earlier this week, Toyota Australia President and CEO, Max Yasuda, warned the industrial action had wider implications than lost production and revenue. Mr Yasuda said continued industrial action would put “a serious dent in Australia’s reputation as a car maker” and could hurt Toyota Australia’s future as a significant vehicle manufacturer and exporter.
Each day off work directly results in lost production of 580 Toyota Camry, Hybrid Camry and Aurion vehicles and more than $8 million in lost revenue.
Mr Smith said the unions and workers appreciated Mr Yasuda’s concerns over the wellbeing of Australian production and admitted striking was not ideal. “We certainly don’t dismiss what the company is saying,” Mr Smith said. “It’s no secret the industry, with the value of the Australian Dollar, is facing a lot of difficulties. The timing of this dispute is not perfect, but then the timing of any dispute is never perfect. In an ideal world we would sit down, sort out the numbers and keep making cars.”
Mr Smith confirmed the industrial action, which is entirely based on employee wages and pay raises, stemmed from discussions with Toyota Australia that started around February/March this year.
Prior to this year, the employees received two one-year increases: a 3.0 per cent bonus in 2009 that was not rolled into hourly rates, and another 3.0 per cent bonus in 2010 that was rolled into hourly rates. The latter agreement expired on July 26.
Toyota Australia is currently offering a package that will see workers’ pay increase by 11 per cent over 39 months. Mr Smith explained the package is divided up to deliver a two per cent increase from September 6, 2011, 2.5 per cent from April 2012, three per cent from April 2013, and 3.5 per cent from April 2014.
The unions and workers want three annual pay increases of four per cent, and want them backdated to July 26, when the previous agreement ended.
Mr Smith admitted Toyota had moved “quite a bit” in negotiations to try to satisfy the unions, but he admitted the sticking point was the final one per cent, the time period and Toyota’s refusal to backdate the increases. He described Toyota’s reluctance to meet the workers’ final demands as a “slap in the face”, and said being awarded an increase that they believed was fair and reasonable had become a “matter of principle”.
“The workers believe they’ve done the right thing by the company. They’re saying the cost of living pressure is hurting, especially utilities which are skyrocketing.”
Mr Smith said the unions would take the opportunity to sit down with Toyota again in coming days in an attempt to reach an agreement. If that proves unsuccessful, he said they would push on with planned strikes next Thursday and Friday.
Ms Hill said Toyota Australia was willing to meet with the unions and workers to try to reach a resolution.
In effect, if the strike continues for a third day tomorrow, both Toyota Australia and the workers will have effectively shot themselves in the foot.
There are 231 work days per year (when you take out weekends, public holidays and annual leave days). One per cent (the sticking point in the negotiations) of 231 days is 2.31 days. Therefore, if you strike for three days, you lose more than one per cent of your annual salary.
In the case of Toyota, let’s estimate that the 3300 workers earn an average annual salary of $60,000 (a generous estimate). That means the total annual salary bill of these employees is around $200 million. One per cent of that is $2 million, which is therefore roughly the amount that Toyota would need to spend to cover the workers’ strike concerns.
With Toyota’s production losses totaling $8 million per day, a third day of striking will cost Toyota Australia $24 million in total, or roughly $22 million more than would have been necessary give workers their extra one per cent pay raise.