Car Manufacturing Industry - Report Example

CAR MANUFACTURING INDUSTRY By (Name of Student) Student ID Number Subject Code Due Date Introduction Previous researches [1, 4] have stated that, motor vehicles aid in independence and mobility for communities and families around Australia. They are perceived as being workhorses for transport and freight sector, they are viewed as the central pillar to the Australian economy and people’s ways of life. The Australians automotive industry has an international and national workforce of about 400,000 people who are directly and indirectly employed. These workforce produces a significant number of vehicles per year. Australia leads the world in the adoption of latest safety technologies, an example being; Electronic Stability Control. The workforce in Australia is represented by “Australian Manufacturing Workers’ Union (AMWU)” which represents an approximated number of 100,000 members who work in various se sectors in Australia. The Australian Automotive industry has collapse led due to unspecified reasons. Some people perceive that Australian Unions are responsible for the industry’s collapse while others think otherwise. This report will take a close look and critically analyse the claims in the verge of trying to verify them. In reference to previous studies [2, 4], the automotive industry comprises of several hundred of component suppliers and four major vehicle assemblers namely; Holden, Ford, Toyota and Mitsubishi. Ford and Holden are owned by America while Toyota and Mitsubishi are owned by Japan. Automotive industry has lately been subjected to political, economic and institutional pressure from local, national and global levels. This has influenced structural reforms in the industry. Introduction of Enterprise bargaining agreements (EBA) during early 1990’s as a regulatory mechanism for conditions and wages in Australia, is one type of reform that was introduced. Automotive industry is unique in many ways. This uniqueness led to the introduction of enterprise bargaining agreement. This was done through the use of enterprise awards for every vehicle assembler when they moved from industry wide awards. The AMWU is blamed for having not incorporated proposal within EBA’s concerning working conditions of employees and wages paid, furthermore, these characteristics are not standardized hence they vary from one company to another. The union failed to implement the Workplace Relations Act 1996. This act affirms the general commitments of vehicle assemblers to the “collective bargaining process”. The Act contains the provision for individual and “non-union employment contracts” commonly known as the “Australian workplace agreement” which replaces enterprise bargain agreements and rewards. However, the union failed to ensure that was adopted by all assemblers. The workplace agreement was not adopted in American assemblers (Ford and Holden). This introduced unfair working conditions and terms among the assemblers. Previous research [3] argued that, Australian manufacturing and workers union practiced different operational condition for different assemblers. This made some assemblers operate uniquely and implemented strategies that others were not allowed to practice. For example, in 1996, Mitsubishi entered into agreement with Adecco hiring firm and AMWU the agreement gave Adecco Company the rights to hire and pay workers who worked for Mitsubishi hence Adecco was the employer while Mitsubishi was the beneficiary. This arrangement highly favoured Mitsubishi’s operations and increased its profit margins as compared to other assembling firms. This exemption was granted to Mitsubishi after it has threatened AMWU that it would close down if Australian plant if labour flexibility was dis-allowed. Australian manufacturing workers union allowed Mitsubishi to exercise labour flexibility and payments of low wages while other assemblers were denied the right to practice it. The Australian Unions never accepted the need to review assembly employees pay, conditions, entitlement and constraints that imposed on the management. The Union has clearly appeared to deny responsibilities for the serious predicament that were faced by former employees of the industry. Moreover, the Unions have relented on issues that concerning higher labour costs and inflexibility in working practices hence jeopardising the Australian local firms’ competitiveness in national levels. This in return makes it difficult for Australian firms to accommodate international completion and pressure in the industry. The Unions were further reluctant in removal of protracted bargaining practices and minimization of industrial disruption, the Unions have consistently assumed the workforce commitment in revolutionizing work productivity and practices. This meant that automotive industry’s productivity and reforms lagged other Australian industrial sectors the no doubt embraced legislative opportunities of 1996-2007. Australian Unions also embraced a one off production strategy. It this strategy, production of vehicles was on order basis. Although the introduction of the strategy reduced carrying costs and inventory, it had serious repercussions on the overall production. This eventually led to high operating costs that led to reduction in labour force and in return it led to work duplication and contract or job terminations. Recent studies [2, 5] stated that, the Unions ought to have ensure that the present automotive industry was not paradoxical. The Unions should have first and foremost ensured that all EBA’s recognized tenuous position regarding automotive firms and jobs were upheld. EBA’s content concerned with on-site workplace relations were not in contrary to creation of a competitive and productive industry. This could ensure that small component suppliers were not removed from business and jobs were not lost due to company’s closure. The Unions ought to have enhanced attainment of the EBA’s objectives of recognizing productivity and competition among firms. This would have eradicated the vulnerability of Australian firms in international competition recognition. In return, this would ensure that the Australian firms were contented with their workforce and deliverable, therefore they could not have any interests of acquiring or adopting external factors or “shocks” that are more likely beyond their control. Union’s right ought not to have been prescriptive, restrictive and inflexible. Furthermore, they should not have influenced the Enterprise Bargaining Agreements (EBA’s) objectives since with the presence of these characteristics, the demise and associated job losses could eventually be notable in the Australian automotive industry. Australian Union officials should have dieses from boasting of attained bargaining prowess and their leading entitlement was an extremely wonderful outcome for the members. They also ought to have stopped denying of any responsibility concerning the declining position of the Australian automotive industry. Moreover, the need to relentlessly employ necessary mechanisms to ensure that industry is value adding to Australia in terms of economic enhancement and livelihood of the Australian citizens. The Australian Unions should have embraced and fully utilized that government’s support other than adopting a closed minded and predictive approaches to workplace relation bargaining. More so that Unions ought to have enhanced culture that enhance efficiency and productivity. Union member needed to adopt effective negotiating teams with concerned parties for example managers and industry associates in identifying and solving articulating issues that concerned the automotive industry. Research [2] elaborated that, the Australian government’s assistance ought to be contingent to the automotive industry’s Unions and employees transforming workplace relation(s) to developing a working model that is flexible, modern and productively oriented. The Unions ought to somehow diminish their powers in order to accommodate more direct employee-employer engagement. The Unions should have not insisted on manufacturer’s retention of entitlement like for the example of (APV Automotive component pty Ltd) Mr Hickling stated that enterprise bargaining agreement imposed so much costs on the company. The receiver public prosecution advisory board argued that the Australian Unions insistence on retention of entitlement could as well be viewed as “ the Unions pyrrhic victory” since the entire automotive workforce ended up in jeopardy. The Australian manufacturing workers Union did not achieve objectives that had been laid down by the Enterprise Bargaining Agreement. These objectives were; a) To continue enhancement of jobs securities through the improvement of quality, increase competence and productivity. b) Maintain ace and improvement of on-going viability of manufacturing companies and persistence on the improvement of fulfilling jobs and better security for employees in accordance to employment and income. It is research indicated that AMWU viewed these objectives as meaningless commitments that were generated merely through pattern agreement that were more off destructive other than supportive of jobs sustainability and competitiveness among firms. The Unions should have taken considerations before enforcing contractual condition on the manufacturers. The conditions were viewed by the manufacturers as being unconducive and unfavourable in vehicle production industry. The conditions included; a) Conditions on areas where work was to be done b) Prescription on as to why the contractor was required c) Consideration of whether the work could be performed with the employees d) Conditions on whether training opportunities for the in-0house employees were considered e) Critical review on any concerns or issues by the contractor in regard to the work to be performed f) Condition of the manufacturer to provide a written advice on the contractor performance g) The condition requiring the manufacturer to review on jobs that would require contractual services in forthcoming period References [1] Johnson, K.G. and Khan, M.K., 2003. A study into the use of the process failure mode and effects analysis (PFMEA) in the automotive industry in the UK. Journal of Materials Processing Technology, 139(1), pp.348-356. [2] Lloyd, J. and Lyons, R., 2012. The Automotive industry: Workplace relations impediments to its survival. [3] Lansbury, R.D., Wright, C. and Baird, M., 2005. Decentralised bargaining in the Australian automotive assembly industry. Reworking, p.331. [4] Mackay, D. and Rosier, M., 1996. Measuring organizational benefits of EDI diffusion: A case of the Australian automotive industry. International Journal of Physical Distribution & Logistics Management, 26(10), pp.60-78. [5] Productivity Commission, 2014. Australia’s automotive manufacturing industry. Read More