TOYOTA workers' worst fears were realised yesterday when the company announced it would axe 350 jobs at its Altona North factory.
Toyota Australia president Max Yasuda said falling international demand for Australian-built Toyotas resulting from the high Australian dollar had triggered the decision.
The move sparked fears the job losses could snowball through to the parts supply industry, whose viability, and 40,000 jobs, depends on the number of cars made locally.
Toyota Australia typically exported up to 80,000 cars a year to the Middle East and other overseas markets, but Mr Yasuda said he was looking at little more than half that amount this year.
''We have strong sales forecasts for the domestic market, but the reduction in the export market is so huge we can't cover it with incremental sales in the domestic market,'' he said.
The company plans to make 95,000 cars this year, almost 40 per cent fewer than its production peak of 149,000 cars in 2007.
Federation of Automotive Products Manufacturers chief executive Richard Reilly said the number of cars produced in Australia was vital to employment levels in the components industry, comprising 180 to 200 companies.
Yesterday, the more than 3300 workers assembled at the plant for a company-wide briefing heard that more than one in 10 jobs will be axed by mid-April. The job cuts will be in vehicle assembly and painting, as well as in management.
Mr Yasuda said the plan would make the company more competitive but would only see it through to the end of current model cycles, or about the next five years. All the jobs axed will be forced redundancies.
The federal secretary of the Australian Manufacturing Workers Union's vehicle building division, Ian Jones, said Toyota had reneged on its commitment in the enterprise bargaining agreement signed last month to consult with the union ahead of any job cuts.
''It's extraordinary that there are procedures in the agreement laid out for how you handle these things, and Toyota is simply not following any of them,'' Mr Jones said.
Mr Yasuda said there would be a 10-week consultation period with the union.
The decision inflamed an already heated debate in Canberra over the level of government support for the struggling industry.
Manufacturing Minister Kim Carr said Toyota had looked at ''every option'' to avoid axing jobs. ''But the harsh reality of the continuing strong Australian dollar means that Toyota's export markets are under severe pressure and they are struggling to sell enough cars to keep the Altona line at full capacity,'' he said.
In Sydney, Opposition Leader Tony Abbott said the news did not alter the Coalition's plan to cut $500 million from the federal car grants scheme, despite reports the idea is unpopular with elements of the Liberal Party.
''Under our proposals, there will be $1 billion in the automotive transformation scheme … but we're not prepared to invest beyond the $1 billion that we say should be in that fund,'' he said.
''I think that is a lot of money to help the car industry to flourish in this country.''
Victorian Premier Ted Baillieu said the state government would ''do what we can'' to help manufacturers survive in Victoria, saying there was no doubt the dollar was putting stress on the industry.
Local state Labor MP Jill Hennessy said the Toyota decision could have a ''devastating'' effect on long-term employment prospects in the western suburbs.
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