Due to the deflationary and debt forces, the world is in a desperate state.
This has been a critical year for Australia’s once-booming car industry. The Australian car market has suffered a series of setbacks: Ford announced that it would shut down Australia’s entire manufacturing plant in May. In December, General Motors followed suit.
Toyota will slowly shut down its production lines by 2017, indicating that car manufacturers’ slow death in Australia could be a warning sign for a recession. Toyota admitted that it was sad to shut down its assembly lines in Victoria while blaming the rigidity of the Australian dollar.
About 2,500 Toyota workers are expected to lose their jobs. With a high unemployment rate in the automotive supply industry, and further than this, the economic consequences will be far more severe than we can imagine. This could wipe out AU$21bn (US$19bn) and leave as many as 2000,000. These jobs include those in transport, logistics, and other business services.
Associate professor John Spoehr, executive Director of the Australian Workplace, Innovation and Social Research Centre, University of Adelaide, says, “We are now really beginning to experience some of [economic] the worst conditions that other countries such as Britain and parts of Europe faced.”
He said that the state of South Australia and Victoria, which are primarily involved in manufacturing, could soon be caught in recession.
He stated, “this is the end of the car manufacturing industry as we know.” He also told BBC that the effect on the workforce would be “terribly disruptive” as more people will experience long-term unemployment, which is difficult to recover.
Prof Roy Green, UTS Business School, says, “We should have recognized some time ago the future of assembly manufacturing in car making was very limited.”
Labor believes that Australia may now experience the next Great Depression post-World War II.
What is the best thing that could happen to the 50,000 people in 2017?
Pure academic research suggests that about a third of those who are currently unemployed due to the events in the car industry will never find work again. According to Professor Roy Green (Dean of the University of Technology Sydney’s Business School), there may be hope for many others.
“We should have known long ago that the future for assembly in car manufacturing was uncertain and should have prepared for it.” He says, “We didn’t, but we still had time to organize a successful transition for workers involved in the industry, and for the future Australian manufacturing.”
Federal Labor MP Kelvin Thompson is one of many politicians who believe there should be limits on the influx of foreign workers. However, jobless locals should have first access to these opportunities.
He says, “We have already 700,000 Australians out-of-work, and we have rising unemployment. So it is absurd for us to continue running migrant worker programs at the record levels that they have been.”
Many believe Australia’s vibrant service sector will keep the economy afloat and ensure economic stability. Economic editors believe it is wrong to be sentimental about the passing of an industry whose products are not in high demand.
Australia is nearing its inevitable fate. We are left with many questions: Is recession going to harm the Australian economy as much as we have projected?
