The Port Melbourne-based manufacturer says the proposed changes to the terms and conditions are intended to “keep the company at the negotiating table for future investment opportunities” and improve the long-term viability of its local operations.
Toyota says the proposed changes involve “the removal of outdated and uncompetitive practices and allowances that increase its labour costs”, and are intended to provide greater flexibility and increase its global competitiveness.
Toyota Australia president and CEO Max Yasuda and executive vice president and COO David Buttner met with manufacturing workers and union officials today to ask for their continued support as it prepares to take action.
Yasuda said the company was working hard to ensure Toyota’s long-term manufacturing future in Australia, but insisted everyone “must do more” if it was to move towards global competitiveness.
“Our continuous improvement towards global competitiveness is crucial to securing production of the next-generation vehicle and maintaining our export program,” Yasuda said.
“The support of our employees is needed to modernise the work practices at our plant to increase productivity and improve our competitiveness."
Yasuda says the company remains committed to reducing the manufacturing cost of each vehicle it builds by $3800 by 2018 but needs to work harder to achieve that goal.
“Although we have made progress, the speed of change has not been fast enough,” he said.
“We need to take urgent action because we are now seeing gaps in our transformation plans. We must develop detailed plans to close these gaps if we want to remain at the negotiating table for future investments.”
Yasuda said the company wanted to stand by its commitment to honour the two scheduled pay raises for 2014, and will work closely with its 2500 manufacturing employees over the coming weeks to explain the need to modernise its work practices.
Australian Manufacturing Workers’ Union assistant federal secretary David Smith told CarAdvice the car maker had so far been vague about its proposed changes.
“They’ve taken us through the business rationale as to why they need to do what they’re doing, but in terms of identifying the parts of our current agreement that they want to look at and the flexibilities that they want to examine they haven’t given us any detail on that,” Smith revealed.
“Without giving us any detail of exactly what they’re looking at it’s very, very difficult to say whether there is any scope to reach any agreement around those particular points.”
Smith said there had been no suggestion of further job cuts at this stage beyond November’s 100 planned redundancies, announced earlier this month.
“Not at this point,” he said. “There are redundancies that are scheduled to take effect next month and that’s all they’ve spoken to us about.”
Smith said Toyota Australia’s proposed action came as little surprise given the uncertainty surrounding the industry following the Federal Government’s call for a review from the Productivity Commission.
“They’re obviously struggling. I don’t think the current government’s position is helping them, saying that they’re going to punt off the industry to a Productivity Commission review.
“They’re going to continue with this uncertainty for some time and certainly up until at least March. It’s certainly not helping Holden at the moment.”
Smith said Toyota admits it would be tough to continue building cars in Australia if Holden ceased production, but insists government support is the key to its future.
“We did speak to [Toyota] about what happens if Holden left. They’ve indicated that if that was the case they would probably find it very difficult to continue to operate in this country.
“But certainly they’ve made it quite clear that if there wasn’t government support available like there is in every other country in the world that has a vehicle manufacturing industry that would lead to the closure.”
Smith described $3800 as “an enormous amount of money” to cut from a vehicle, but said the company was simply attempting to do what it needed to do to secure future funding and export contracts from its Japanese parent company.
He said Toyota Australia executives would sit down with the senior site coordinator and stewards at the Altona plant tomorrow to outline the changes they were seeking, and expected that information to be relayed to union officials and workers over the coming days for them to consider the company’s proposal.