The impact of the announcement was felt right across Australia, but even more so here in Western Sydney, heartland of NSW manufacturing Sadly, 1,200 Ford employees will lose their jobs as a direct result of the closure, which is slated for 2016.
It is unlikely the job losses will end there; there will be many suppliers of automotive components right across Australia who will struggle after the loss of such a significant customer.
Deloitte’s Motor Industry Report* showed 2012 was a record year for car sales in Australia, with over 1.1 million units sold, although a falling percentage of those vehicles were manufactured in Australia, as keenly priced aspirational brands, which are manufactured overseas, continue to grow their foothold in the local market.
There has been much debate of late regarding the viability of automotive manufacturing in Australia, and questions raised about the effectiveness of subsidies paid by the Government.The announcement by Ford has only intensified this debate.
There is no doubt that we are coming through a painful period of transition in terms of our domestic manufacturing sector. But fear not, there is light at the end of the tunnel for those willing to embrace new trends and adopt new business models.
The areas that will define Australia’s manufacturing competitiveness over the next five years will include innovation, skills, the economic, trade and finance environment, the approach to clean energy and digital technologies.
Here in Western Sydney we have a diverse manufacturing sector with long established players and a new breed of vibrant emerging companies, competing and flourishing in a diverse range of sectors. Whether they are design, technology, pharmaceutical, food production or packaging focused, they are creating jobs; driving innovation throughout our society; and delivering consumer solutions – all of which are keys to long-term and sustainable economic growth.
The successful Western Sydney manufacturers that I talk to have a number of things in common; they are focused on innovation and research, understand the importance of remaining agile to respond to new market trends, keep close to their clients and embrace disruptive technology.
Western Sydney also has a number of projects focused on growing the next generation of high value manufacturing including the Westmead Biomedical Precinct and Western Sydney Business Innovation Park.
Through these innovation precincts and the great work of technology focused incubators like BlueChilli (bluechilli.com) and Pollenizer (pollenizer.com), we are encouraging the development of a highly skilled and high-value knowledge sector, which will provide Western Sydney with jobs and growth opportunities for generations to come.
One thing is for certain, the businesses that emerge from this period of change will be some of the most resilient in Australia. Put simply, if you can run a profitable and competitive business in today’s environment with a strong A$, high labour costs and competition from overseas you are built to last.
*The Deloitte Motor Industry Report can be accessed at https://industryoverview.eprofitfocus.com/
Kate Hill is a partner at Deloitte Private based at Parramatta. Contact her at khill@deloitte.com.au
