Holden have just announced they are ceasing the production of vehicles in Australia by the end of 2017. The official statement from Detroit is now available and points at the rising Australia dollar since 2001 as being one of the key motivators. From 2018, Holden will be reduced to a national sales company, a national parts distribution centre, but thankfully, like Ford are keeping their global design studio.
As a result of the company’s actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce. The Australian Manufacturing Union says the flow on effects for parts manufacturers is estimated to impact up to 50,000 jobs across the country. After Mitsubishi left some time ago, Toyota is the last remaining vehicles produced in Australia and the chance of them being able to continue is highly unlikely.
Given Ford are ending production in 2016 and Holden in 2017, it’s worth taking some time to analyse why Australia is such an expensive place to manufacture vehicles. Holden says that 80% of its costs can be attributed to labour, yep, eighty freaking percent. So while we may want an automotive industry in Australia, to make it viable and more competitive in an international marketplace, we need to look at using automation to bring down human labour costs.
Right now the production of vehicles is automated to a certain extent, but how much? Every time we see a clip from a Holden or Ford production line, there’s a swarm of people around the vehicle. So while the creation of the frame, engine, welds and painting are all currently done by robots, there’s still a lot of human intervention required.
Tasks like installing the dash and seats, the stereo and tail lights are all done by hand. Given the robots of today are more nimble, more reliable than ever before, why are we still using so many human hands to do these tasks that ultimately add to the price of the car?
Ford Australia use around 522 robots where Holden have just 400 robots on their production lines. The intelligence and capabilities of each robot clearly vary considerably, so the number alone doesn’t tell us the whole story. What we do know now is that manual labour vehicle assembly jobs are gone, what we will need is highly skilled employees that program the robots to build the vehicles of tomorrow.
Telsla Motors.. there’s going to be a couple of spare factories with cheap rent pretty soon.. interested?
Image credit: ABC