This article is more than 6 years old

This article is more than 6 years old

Australia’s last remaining carmaker, Toyota, has announced it will cease production in 2017 with the loss of 2,500 jobs.

Coming after last year’s announcements that Ford will cease production in October 2016 and Holden in 2017, the decision also means the end of a car components industry that employs more than 30,000.

The company blamed the high Australian dollar and a fiercely competitive market for the decision, which it described as “painful”.

In a statement handed out to workers at the company’s factory in Altona on the outskirts of Melbourne, Toyota president Akio Toyoda said: “We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort.

“However, various negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision.”

The Abbott government insisted on Monday that unspecified new jobs will be created to help Victoria and South Australia recover from the job losses.

But Labor and the unions blamed the closure on the Abbott government’s refusal to guarantee long-term car industry assistance, paving the way for a bitter political contest over job losses and industry assistance as the parliamentary year begins on Tuesday.

Prime minister Tony Abbott, who was announcing a royal commission into union corruption as Toyota was trying to reach him to tell him about the decision to close, said that while it was “devastating news” the “constant focus of the Coalition government is to ensure a strong economy where the number of new jobs outweighs the number of jobs closing down”.

“I am not in any way trying to avoid my own responsibility, but that responsibility is fundamentally to ensure we have a strong economy with taxes as low as possible, regulation as light as possible and productivity as high as possible.”

Opposition leader Bill Shorten said Abbott did “not give a stuff about jobs in Australia”.

“While Tony Abbott was playing his political stunts today 2,500 workers lost their jobs … in five months we have seen the death of the Australian car industry and 5,000 manufacturing jobs lost – that’s1,000 jobs a month,” Shorten said.

Shorten said the prime minister had forced Toyota’s hand, cost 50,000 direct Australian jobs in the automotive industry and jeopardised 200,000 jobs which rely indirectly on the automotive industry.

The Coalition has refused further car industry assistance, but when Holden announced it was leaving Australia late last year, Abbott said he was hopeful Toyota would continue production because it produced cars for export.

“I certainly hope Toyota can stay. They have a very different business model to Holden. It’s a business model that relies substantially on export and that’s why I think we’ve got good prospects of keeping them,” he said at the time.

'’I think there’s every chance that we can keep Toyota but the level of assistance that Toyota can expect is roughly the same level of assistance that they have previously received.’'

The decision, on top of Holden’s announcement in December, means there is a real risk the economics of South Australia and Victoria could sink into recession.

Industry minister Ian Macfarlane promised an assistance package to help the states, saying industry in Australia “would never be the same again”.

“I’m confident that managed properly we can manage this transition,” he said.

“In terms of Holden and Toyota, we are talking about closures which are three years away. We need to make sure that we do everything we can to facilitate new industries, we get rid of costs, we get rid of the carbon tax, we get rid of regulation, we do those things and we encourage industry to invest in Australia, and I’m confident we can do that.”

Macfarlane said the government had not reached a point in discussions where it had offered any support packages and the company had expressed “frustration” with its industrial relations situation.

“But I want to assure Toyota workers … we will make sure we have opportunities for them,” he said. “There’s a future for industry in Australia but it is a different future, which we have been trending towards for some time.”

Macfarlane said the announcements of the Australian closures of Holden and Toyota within months of each other was a reflection of global trends and a very competitive automotive industry.

When asked if the future pullouts of Holden and Toyota would affect the Coalition’s pledge to create 1m jobs within five years, he replied: “Redundancies are part and parcel of the Australian industry sector and as the PC [Productivity Commission] report pointed out, hundreds of thousands of redundancies are issued each year and Australian workers and Australian industries move forward to that point, build on that and put in place more efficient, more competitive industries.”

Dave Oliver of the ACTU said the closure was not just the demise of the company but the demise of an industry that was the “bedrock” of Australia’s manufacturing sector for many years.

“We are certain this is a result of the federal government’s inability to fight for jobs, inability to fight to sustain the industry in this country, unlike other governments around the world.”