Government must anticipate further aftershocks from automotive closure

The first thing we need to appreciate is that the experience of those who leave prior to closure is often very different from those who walk out the gates on the last day.

A good number of those who leave early retire, while others manage to find good jobs. Many move from job to job, unable to secure anything other than casual and short-term jobs. For those who leave at the time of closure, the competition for secure and rewarding work is more intense. When General Motors Holden (GMH) closed, a few thousand additional people began the search for work in South Australia, intensifying competition for available jobs, particularly suitable full-time jobs.

Losing your job is tough at any time, but it is particularly difficult for manufacturing workers when most of the available jobs are in sectors that you are not qualified for. Investment in major construction projects has helped overcome this problem to a significant extent providing access to a stream of new full-time jobs. Meanwhile the jobs dividend from expenditure in naval shipbuilding will take some time to reach its peak and help compensate for automotive job losses. Full-time employment growth will need a boost in the short term, principally by maintaining a high level of infrastructure project expenditure.

There is good news as well. Many former automotive workers have made successful transitions into rewarding jobs, benefiting from the training and assistance offered to them by GMH and the State and Federal Governments. Indeed, the outcomes for a high proportion have been very positive for just this reason — early access to high quality support systems, financial assistance, counselling and training programs.

No amount of support to individuals, however, generates the full-time jobs that most seek. What has made a difference has been ensuring that investment in major infrastructure projects has remained at around $2 billion per annum. Additionally, financial support from both the State and Federal Government has helped a wide range of companies to accelerate their efforts to diversify and employ more people.

The task of supporting workers who have lost their jobs as a consequence of the automotive closure is about half done. It began more than two years ago when we knew the industry was going to close. It needs to continue for another few years to deal with the reality that many of those impacted will continue to struggle to find secure and appropriate work.

Congratulations are due to the State Government and GMH for the work done so far in support of automotive workers. The commitment has been substantial and the program well executed. There is a high risk, however, that hardship will escalate if efforts to support the affected workers and their families are prematurely wound down. Past experience indicates that we need to sustain support programs well after closure. Efforts to maintain contact with those impacted have to be intensified and often modified to meet new, unanticipated needs.

Under current arrangements, the transition support programs provided by government and GMH are due to wind down over the next 12 months. It is likely that demand for the services has probably tapered off six months after the closure but that is not evidence that all needs have been serviced or dealt with. Some former auto workers will have taken a break while many others continue the search for more secure work.

Current demand for services is not a good indicator of what real demand for support among those impacted actually is. As separation packages are spent and thoughts turn to what’s next, the need for support will grow. It will also remain strong among those who are forced to move from one job to another.

There are also those who, for many good reasons, cannot gain a foothold in our competitive labour market. Typically these are 50 to 60-year-olds who are more vulnerable than most to unemployment and long-term unemployment.

Lessons from history need to be combined with a sober analysis of the challenges of the present to inform the next steps. While the package of measures put in place over the last few years has been very effective, more will need to be done over the next two years to avoid a significant proportion of those impacted experiencing hardship, largely as a consequence of unemployment and underemployment.

The new Marshall State Government can lay the foundations for a sustained commitment to supporting those impacted by resourcing a package of measures in the State Budget in support of the work of the Automotive Taskforce over the next two years. This of course must be matched by a commitment from GMH to stay the course, recognising that the impacts of closure will continue to play out for a long time to come. The wellbeing of many former auto workers and their families is at stake.

John Spoehr is director of the Australian Industrial Transformation Institute at Flinders University

@JohnSpoehr