This paper examines the pressures globalization has placed on Australia's automotive assembly industry since the late 1980s, focusing on the four major vehicle assemblers — Ford, GM-Holden, Mitsubishi, and Toyota. It analyzes how management adopted lean production systems, how government tariff and bargaining policies shaped employment relations, and how institutional frameworks influenced the degree of convergence or divergence across assemblers. The paper also explores the ongoing strength of trade unions, particularly the Australian Manufacturing Workers Union (AMWU), and identifies future challenges including skills development, export orientation, regulatory standards, and the long-term viability of domestic automotive manufacturing in an increasingly globalized market.
Globalization is a process of interaction and integration among people, companies, and governments of different nations. It is driven by international trade and investment and facilitated by information technology. This process has consequences for the environment, culture, political systems, economic development, and human well-being in societies around the world. The current wave of globalization has been driven by policies that have opened economies domestically and internationally. Since the Second World War, and particularly during the past two decades, many governments have adopted free-market economic systems, greatly increasing their productive potential and creating new opportunities for international trade and investment. Governments have also negotiated significant reductions in barriers to trade and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new prospects in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining characteristic of globalization is an international industrial and financial business structure (What Is Globalization, n.d.).
The automotive manufacturing industry has played an important role in the development of the Australian economy. It accounts for almost six per cent of the total value added in manufacturing, making it one of the principal manufacturing sectors and one of Australia's most important export industries. The sector comprises several hundred component suppliers and four vehicle assemblers — Ford, GM-Holden, Mitsubishi, and Toyota. The first two are American-owned and the latter two are Japanese-owned. GM-Holden and Mitsubishi have assembly plants located in Adelaide, South Australia, where manufacturing has historically been central to the local economy. Ford and Toyota's assembly operations are located in Melbourne, Victoria, where the economy is more diversified. GM-Holden also operates an engine manufacturing plant in Melbourne (Lansbury, Wright, and Baird, 2006).
The growing competitive nature of the automotive industry at a global level, declining profits, and a deteriorating ratio of exports to imports in the Australian industry have encouraged governments, manufacturers, and unions to explore ways to improve the sector's efficiency. Another significant change affecting the Australian automotive industry has been the shift from a largely centralized system of industrial relations to a more decentralized form of enterprise bargaining. This involves direct negotiation between employers and their employees. In the auto industry, most employees are unionized, and unions negotiate enterprise agreements on their behalf. Enterprise bargaining agreements (EBAs) are underpinned by awards, which are generally established on an occupational or industry-wide basis (Lansbury, Wright, and Baird, 2006).
Largely due to Toyota's dominance and its success in pioneering lean production, all companies operating assembly plants in Australia have adopted a variant of the Toyota Production System. Each company has developed its own hybrid system of production based on a combination of its own management philosophy and elements of lean production. The introduction of new production systems in assembly plants has had significant implications for how work is organized and how decisions about workplace change are made. Senior managers among Toyota's competitors recognized that Toyota's successful implementation of lean production sets the benchmark for the industry. Indeed, Toyota's enterprise agreements address production-related provisions more comprehensively than those of the other assemblers, with its EBAs specifying that formal, accredited training is provided to familiarize employees with the Toyota Production System. Ford and GM-Holden are also quite detailed in their discussion of production system arrangements, but this is not the case with Mitsubishi's EBAs and awards, which reflect its status as having the least automated production arrangements of the four assemblers (Lansbury, Wright, and Baird, 2006).
Despite Toyota's well-established production system, one union official claimed that Ford had the "leanest" production system of the four assemblers, and a number of Toyota's managers also conceded that its production techniques could be leaner. Greater use of technology and the introduction of leaner production methods have improved efficiency and output across the four assemblers and raised employee skill levels. Nevertheless, employee feedback indicates that the increased speed of the production line has had negative repercussions for work intensification and has raised concerns about the potential elimination of jobs (Lansbury, Wright, and Baird, 2006).
There have been significant changes to job structures and classifications in the automotive industry in recent years. The number of job classifications fell from 240 under the award system to only three non-trade levels and six trade levels. These reforms came about not through enterprise bargaining activity but rather through a government-led initiative in the late 1980s to restructure awards, consistent with lean production principles. As a result, all automotive assembly sector awards issued since 1988 have established new classification structures setting out job requirements in terms of competencies, experience, general duties, and tasks for all non-salaried occupations, as reflected in the Toyota Award. Considerable efforts have been made in recent years to reduce demarcations between trade and non-trade employees. While some managers maintain that there is greater scope for production workers to move into trades roles, tensions have begun to re-emerge over the definition of duties between trades workers and technicians (Lansbury, Wright, and Baird, 2006).
The automotive manufacturing industry has played an important role in the development of the Australian economy, accounting for nearly six per cent of the total value added in manufacturing. This has made it one of the main manufacturing sectors and one of Australia's most important export industries. The dismantling of tariffs by governments over the past two decades has exposed local automotive producers to greater import competition. One consequence has been that Australian manufacturers shifted their focus away from the local market toward overseas markets, principally the Middle East. However, while the volume of exports by Australian producers has increased over the past decade, this growth is modest compared to the surge in imports (Lansbury, Wright, and Baird, 2006).
The longer-term outlook for the Australian automotive industry remains uncertain due to import competition, changes in government policies on tariff protection, fluctuations in the exchange rate of the Australian dollar, and questions about whether globalized companies are willing to make long-term investments in the domestic automotive assembly sector. Because of the small size of the Australian market, the long-term viability of the industry depends on strategies adopted by companies to produce vehicles of world-class quality and to secure access to overseas markets. Enterprise bargaining will continue to be an important measure of the extent to which companies seek to integrate employment relations into such strategies. However, the continuing influence of national systems of employment relations in an increasingly globalized industry remains to be seen (Lansbury, Wright, and Baird, 2006).
"Institutional factors shaping convergence across four assemblers"
"AMWU strength and union responses to enterprise bargaining"
"Skills, standards, and government roles for future viability"
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