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Free trade agreement jeopardises local workers

Sydney Morning Herald

Free trade agreement jeopardises local workers

By Alexandra Smith, Transport Reporter

3 May 2005

At least 1000 workers may be jobless within months as two Sydney car-part manufacturers plan to close, or move to Asia, as Australia moves towards a free trade agreement with China.

The Australian Manufacturing Workers Union state secretary, Paul Bastian, said cheaper labour in China and an expectation that a trade agreement would be signed soon would cripple the industry.

Thousands of jobs in the auto components industry would be lost within a year, he said.

"The China free trade agreement, together with existing competition from China, makes it impossible for the Australian auto component industry to survive."

The first companies to signal their intention to leave Australia or greatly cut operations were Tri Star Engineering, of Marrickville, and and Spicer Axle Australia, of Yennora, Mr Bastian said.

The general manager of Tri Star, Vincent Kong, and the managing director of Spicer Axle, Bob Hall, could not be contacted by the Herald.

Mr Bastian said Tri Star, which made steering and suspension components, had started importing parts from India and was negotiating to set up a plant in China after losing key contracts for the Asian market.

Spicer Axle, which has plants making car differentials in Victoria and South Australia, employs 500 people at its Sydney plant, but had lost large contracts and was considering closing. Mr Bastian said he understood that if Spicer was unsuccessful in negotiations with Ford it would close.

"Ford is demanding cost reductions amounting to a 30 per cent cost cut over the next three years," he said.

"In order to enable this to take place, the company has demanded an immediate 15 per cent pay cut for all employees, with additional use of contract and casual employment and the abolition of the current redundancy agreement, with all new employees accepting a 20 per cent pay cut."

Mr Bastian said the Federal Government was not considering the effect that a free trade agreement would have on workers’ rights and conditions.

"What employers are demanding is that workers adopt and compete on Chinese wage conditions," he said.

"What the Federal Government should be doing is have an open and transparent debate in Parliament about not just the economic impacts but also the social costs and implications."

Ambegahewage Jayasingha, who has worked at Tri Star for 18 years, said at least 10 people had been made redundant in the past few weeks and 270 would lose their job by next year.

Mr Jayasingha said Tri Star management told employees that it would consider relocating its Marrickville plant to China and then exporting its parts back.

"My personal opinion is that I would rather pay a few more dollars for something Australian made than buy something from China that will mean people have lost their jobs," Mr Jayasingha said.

He said he did not know what he would do once he lost his job because there were few manufacturing jobs in Australia.