Toyota Case Study

But in the last few years, Holden suffered losses due to strong Australian dollar which directed declining sales of large cars in Australia. Also government fund being reduced this has led the company to look to international markets to increase profitability. Holden announced on 11 December 2013 that production in Australia would cease by the end of 2017 (Put Reference). The car manufacturing industry in Australia provides a useful example of the way in which employment relations are shaped by a combination of global market pressures and local responses by governments, employers and unions. (Evolving Employment relations, Waring ,Bray page number 119 para.

With the increased supply and availability of imported cars, the demand for Australia made vehicles dropped dramatically. This decline is illustrated in the change of top selling cars in Australia. In 2002 the top three selling vehicles were produced in Australia, where as now, only the Holden Commodore ranks in the list (Biddle 2013)... ... middle of paper ... ...r the major automotive manufacturers in Australia to cease production was the consequence of a changing economic structure in Australia, which is seeing the demise of an entire manufacturing industry. Although an unfortunate outcome the role of these companies is to remain competitive and generate profit. Despite government support and constant restructuring the major manufacturers could not change consumer demand, which left the plants performing inefficiently.

Introduction This report is going to discuss why the car manufacturing industry in Australia is closing by using five forces analysis which are the barriers of entry, competitors, purchasing power of buyers, supplies and subsidies segments, and a life cycle analysis. Five forces analysis  Barriers of entry To being with the barriers of entry which including strong currency and higher labor have the most significant impacts on auto making industry. In 2013, Holden would cut 12% of its workforce and has announced a three-year pay freeze agreement to the reminding workers to keep operates the manufacturing plant in South Australia (Thurlow, R. 2013). Moreover, a strong currency not only lead to less competitive on nation exportation but also increases the amount of cheaper imports from emerging market like China and Thailand caused by globalization. For instant, China which enjoys plenty of human power which strengthen its competitive of export products (Curran, E. 2013).

Toyota burns through £27,218,000 on the limited time exercises in the UK. As it was the principal vehicle of its kind because of hybrid synergy, Toyota Prius was upheld by UK government that the Prius proprietor is qualified to not to pay clog charges in focal London which is typically eight pounds for every day. Shoppers and producers will be offered motivating forces to quicken the presentation of hybrid cars which have a petrol engine and an electric engine and those that run totally on power. It is a major preferred standpoint for Prius advancement just for its greener

The announcement of Toyota, the world’s biggest car manufacturers claimed by Gibbs (2014), to cease its production in Australia by 2017, has been brought to national attention involving Federal government, individual workers, workers union and more, as the decision will undeniably constitute some difficulties to the country. To analyze and evaluate the consequences of this decision, the two models of corporate social responsibility that are Shareholder and Stakeholders theories have been taken into account in order to have a better understanding in areas of social responsibility holding by each particular member of the society. Each theory contains a different view of responsibility; the shareholder theory focuses on shareholders’ profit maximization, while the stakeholder theory looks at the wider view of taking each stakeholder’s interest into the equation. The decision made by Toyota clearly has impacts on the society, and undoubtedly leaves the company to hold responsibility more or less. However, considering the professional roles of the Australian government and workers union, they are also responsible for the decision.

The announcement of Toyota, one of the world’s biggest car manufacturers, to cease its production in Australia by 2017, has been brought to national attention involving Federal government, individual workers, workers union and more, as the decision will undeniably constitute some difficulties to the country. To analyze and evaluate the consequences of this decision, the two models of corporate social responsibility that are Shareholder and Stakeholders theories have been taken into account in order to have a better understanding in areas of social responsibility holding by each particular member of the society. Each theory contains a different view of responsibility; the shareholder theory focuses on shareholders’ profit maximization, while the stakeholder theory looks at the wider view of taking each stakeholder’s interest into the equation. The decision made by Toyota clearly has impacts on the society, and undoubtedly leaves the company to hold moral responsibility more or less. However, considering the professional roles of the Australian government and workers union, they are also responsible for the decision.

The decision was influenced by many different factors as well as having knowledge that the car manufacturing industry is economically taxing. The fact that the production of cars in Australia was already in decline made a transformation possible as well as Australia’s high cost and low productivity. This can be viewed, said by Paul Bloxham who is HSBC’s Chief economist, as “globalisation” stating that Australia could obtain the same low-cost manufacturing in relation to the rest of the worlds manufacturing regions. Toyota felt that the Australian dollar was extremely high, and in this case was hindering the company’s exports from functioning sustainably, making the trades unsuccessful. As the engine and car producing company became part of the global manufacturing market, many inexpensive production expanses were located which shrank the size of the Australian industry.

Government Economic Policy In 1988 the government of the day was at a downswing of the business cycle with high unemployment rate (UE%) coupled with high inflation. This caused the real income (YR) to fall. The populus of Australia had less purchasing power causing the aggregate demand to fall (ÓD). With the people of Australia spending less and firms not selling enough inventories the government (G) had less taxation revenue and with firms trying to cut costs, they laid off workers. This caused G non-profitable expenditure (G1) to increase and thus caused deficit budgets.

The purpose of this report is to analyse and evaluate this decision by Toyota according to Shareholder and Stakeholder theories of corporate social responsibility and to identify the consequences of this decision along with responsibilities borne by Toyota, the Australian Government and the Australian Manufacturing Workers Union for these consequences. TOYOTA SHAREHOLDERS The high dollar and the substantially higher labour costs of automotive manufacturing in Australian compared to other countries such as China and Thailand have led to it not being viable for Toyota to continue to manufacture in Australia. Toyota’s decision to cease manufacturing in Australia will have consequences for numerous groups. However, according to Shareholder theory, as advocated by Milton Friedman, a narrow focus of profit maximisation is taken, in that the responsibility of Toyota is to generate profits for its shareholders (within the constraint of the law). The relentless pressure on vehicle producers worldwide to reduce manufacturing costs (“Pro... ... middle of paper ... ... in Australia, the automotive component sector will lose 30000 workers (Wallace &Ferguson, 2014).

Introduction and Summary of case study Toyota Australia, the leader in Australia automotive industry, immediately expressed its fear that facing unpredictable pressure and they would continue with their transformation plan after General Motors Holden announced to exit car manufacturing in Australia. It is true that Toyota is considering whether leave Australia automotive market but it is not decided. However, David Smith, secretary from the Australian Manufacturing Workers Union, said it was almost be true that Toyota would leave Australia. Toyota Australia, the best-selling and most trusted brand in Australia, has a splendid history of more than 50 years in Australia. In 1986, Toyota started exporting and in 1991 Toyota emerged as the industry