Toyota gets authorities help in Australian legal battle image

In order to reduce costs at the country’s last remaining car manufacturer, Canberra has said it will intervene in a high profile court case to support Toyota’s efforts to change workers’ conditions at its plant in Australia.

The unusual legal intervention by Eric Abetz, employment minister, comes ahead of a decision by Toyota on whether to follow Ford and General Motors’ Holden unit by exiting car manufacturing in Australia due to the high cost.

Abetz used a keynote address to the Sydney Institute to issue a warning to unions and employers about the dangers of agreeing overly generous pay deals that undermined business competitiveness.

“Employers and unions must be encouraged to take responsibility for the cost of their deals,” he said. “If this is not done, then we risk seeing something akin to the wages explosion of the pre-accord era [1970s and 1980s], when unsustainable wage growth simply pushed thousands of Australians out of work.”

Abetz said the government would make a written submission to the court in support of Toyota’s proposal that its workers be allowed to vote on the changes in working conditions and pay.

Recent decisions by Ford and Holden to cease car manufacturing in Australia in the coming years have stimulated a political debate over wage moderation and the future of manufacturing. The government is under pressure from unions and the opposition to agree a financial package to persuade Toyota to commit to maintain manufacturing in the country.

Via Financial Times