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Can you use a screwdriver?

Just what was this manufacturing industry that we had to preserve at all costs?  What were the special skills, possessed exclusively, by these workers?  And how long are these skills current in today's environment of rapidly changing technology?

For some years, in the 70’s, before working in government, I worked in the steel industry, for the very company that later shut down in Newcastle, and was involved in satisfying the iron and steel requirements of the many automotive industry component manufacturers that then spread across industrial NSW.  I was a regular visitor at many of the plants like Martin Bright Steels; Overall Forge; and British Leyland.

Apart from a few highly skilled design engineers, the majority of automotive workers are familiar only with the machines, processes and components they employ or assemble each day.  They need to be retrained when new equipment, processes or components are introduced.  As in many other manufacturing businesses they need to have the basic technical education, aptitude and experience to be re-trained quickly and economically,  but their current skills are specific to one manufacturing environment and have a ‘use-by date’.

At another point in my career I was involved in aptitude testing many hundreds of would-be industrial and mechanical apprentices.  It was evident that the required high level mechanical and spacial aptitudes were possessed by less than half of the cohort tested.  And because we were testing an already self-selected group, less than one person in five may have the necessary aptitude.  There is a dramatic difference in mechanical aptitude between individuals, that seems to be independent of home environment or other educational achievement.  As a result, some have speculated that mechanical aptitude is genetic, perhaps reinforced environmentally because those possessing these abilities are drawn to making things and, like musicians, the aptitude runs in the family.  Those at the other end of the mechanical aptitude spectrum have difficulty using a screwdriver and probably see no point in owning one.  

This supports the rationalist argument that Holden, together with other subsidised automotive manufacturers and their suppliers, have been effectively sequestering the best workers.  Not by being the most productive or efficient employers but by virtue of government handouts, and market protection, that allow them to unfairly compete for this scarce resource.  They argue that these, above average, workers should be released to find employment where their skills add real economic value, not in activity that is only profitable with a subsidy.

 

 

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Just as the couple passed him, the lights up ahead changed and the traffic began to move again. 

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Manufacturing in Australia

 

 

 

This article was written in August 2011 after a career of many years concerned with Business Development in New South Wales Australia. I've not replaced it because, while the detailed economic parameters have changed, the underlying economic arguments remain the same (and it was a lot of work that I don't wish to repeat) for example:  

  • between Oct 2010 and April 2013 the Australian dollar exceeded the value of the US dollar and that was seriously impacting local manufacturing, particularly exporters;
  • as a result, in November 2011, the RBA (Reserve Bank of Australia) reduced the cash rate (%) from 4.75 to 4.5 and a month later to 4.25; yet
  • the dollar stayed stubbornly high until 2015, mainly due to a favourable balance of trade in commodities and to Australia's attraction to foreign investors following the Global Financial Crisis, that Australia had largely avoided.

 

 

2011 introduction:

Manufacturing viability is back in the news.

The loss of manufacturing jobs in the steel industry has been a rallying point for unions and employers' groups. The trigger was the announcement of the closure of the No 6 blast furnace at the BlueScope plant at Port Kembla.  This furnace is well into its present campaign and would have eventually required a very costly reline to keep operating.  The company says the loss of export sales does not justify its continued operation. The  remaining No 5 blast furnace underwent a major reline in 2009.  The immediate impact of the closure will be a halving of iron production; and correspondingly of downstream steel manufacture. BlueScope will also close the aging strip-rolling facility at Western Port in Victoria, originally designed to meet the automotive demand in Victoria and South Australia.

800 jobs will go at Port Kembla, 200 at Western Port and another 400 from local contractors.  The other Australian steelmaker OneSteel has also recently announced a workforce reduction of 400 jobs.

This announcement has reignited the 20th Century free trade versus protectionist economic and political debate. Labor backbenchers and the Greens want a Parliamentary enquiry. The Prime Minister (Julia Gillard) reportedly initially agreed, then, perhaps smelling trouble, demurred. No doubt 'Sir Humphrey' lurks not far back in the shadows. 

 

 

So what has and hasn't changed (disregarding a world pandemic presently raging)?

 

Read more: Manufacturing in Australia

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