From The Australian
AUSTRALIA'S car-makers are in the grip of an "absolutely frightening" industrial war that could soon result in Ford shopping offshore for steel and other key components, says the multinational manufacturer's president in Australia, Geoff Polites.
Mr Polites warned that yesterday's resolution of a strike at BHP Steel's Hastings plant in Victoria that threatened to bring the car industry to a halt did little to ease the threat to Australia's "credibility" as a secure place to make vehicles.
The Hastings strike was the third time in less than a year that a dispute had interrupted the lean supply chain to car-makers and threatened to force them to halt production.
Mr Polites described as "absolutely frightening" a threat by the Australian Manufacturing Workers Union to routinely use industrial action in the renegotiation of up to 500 enterprise bargaining agreements at small component suppliers over the next 12 months.
BHP Steel president Col Weatherstone yesterday joined AMWU secretary Doug Cameron and vehicle manufacturers in calling for a national summit on the troubled industrial relations surrounding the car industry.
Meanwhile, Ford signalled to BHP Steel, its workers and the wider components industry that if strikes persisted over EBAs, the company would go shopping elsewhere for steel and other key components.
"We could go overseas right now – permanently," Mr Polites said of steel sourcing. "Every time one of these disputes happens, we look for alternatives overseas.
"I'm not saying we're going to, but the chances are we don't need to buy this steel in Australia any more. And if we move to buy it overseas it will never, ever, come back."
Mr Polites noted Ford Australia already had a long and favourable relationship with Nippon Steel in Japan.
The marginal cost of importing from Japan was "a hell of a lot less than losing a couple of days of production", he said.
Mr Polites also warned the renewal of hostilities in Australian industrial relations had sent a shiver through Ford headquarters in Detroit.
He said this week that Ford Motor Company vice-president Mark Schulz opened their weekly discussion with: "What's new in strike country?"
Mr Schulz, who is also president of Ford Asia-Pacific, has a particular interest in Australia and the long-term viability of Ford locally.
But while Ford and Holden have signalled they might go offshore for suppliers, Toyota and Mitsubishi remain reluctant to pursue that option.
Toyota spokesman Peter Griffin said the company would stand by its local suppliers. "Where possible, we'd actually like to increase local content," he said.
But Mitsubishi spokesman Charles Iles agreed the latest dispute had tarnished Australia's reputation.
Mr Polites suggested that using Japan as a source was just the tip of the iceberg for a whole range of components.
"You've got the rest of the world falling over itself to do business with you, and you've got Australia sending messages to the effect that we don't care," he said.
Ford had not yet spoken to Nippon Steel but ongoing problems with suppliers could force its hand.
The futures of the domestic car-makers and of Australia's $5 billion car component industry were at stake, Mr Polites said.
He said the car industry was increasingly concerned about the rollout of almost $1 billion worth of new models later this year by Holden, Ford, Toyota and Mitsubishi.
Ford has spent $450 million developing its new Falcon and Holden slightly less on its Commodore.
The new Falcon and Commodore models, along with a new Toyota Camry and Mitsubishi Magna, are crucial to each company's future expansion plans.