A long term solution for the Mitsubishi Lonsdale site

Andrew-Burgess Let’s use existing skills to support the defence industry, writes Andrew Burgess.

In 2010 and beyond, South Australia will face many tough questions regarding economic restructuring. As industries such as mining and defence continue to grow and become more economically feasible, other industries will face decline through the increasing pressures of globalisation and technological change.

In Australia there has been a seismic shift from manufacturing based industries to service based industries. Much the same can be said of many other developed countries in the world.

Economic restructuring brings forth a very important issue, namely what can be done with those skilled workers who suddenly find themselves out of a job. In South Australia the policy focus has been on helping these recently unemployed workers find any new job.

Re-employment into jobs where these workers’ skills are underutilised was a large mistake on the part of the policymakers. Many workers could only find part time or casual work for a fraction of the pay and subsequently this places great stress and economic pressure on individuals. Indeed it has been shown over the past 20 years that the demise of secure jobs in traditional sectors and the shift to part time and casual work has been a key reason for growing job insecurity in Australia as well as in the UK.

A more effective strategy for utilising the unemployed workers at the Mitsubishi Lonsdale plant would be a further training or up-skilling program designed to keep these skilled workers within the manufacturing trade. This is especially important given the skills shortage faced by the state at the present time.

Instead the Federal and State Governments responded with the Structural Adjustment Fund for South Australia (SAFSA): a $45 million capital subsidy offering grants to entice new business entrants to invest in South Australia or to encourage existing businesses to expand their businesses further.

The justification for this decision was that the new entrants would absorb the majority of the displaced workers from the Lonsdale site. The government has since been forced to admit that the majority of firms who received grants have not achieved their employment targets. Further, more than half of SAFSA funding was given to businesses in the North of Adelaide when the vast majority of the workers at the Londsdale plant live in the South of Adelaide.

It is clear that a policy intervention was needed in regards to up-skilling or further training of the skilled workers. However as the redundancies at Mitsubishi occurred during a time when the state of South Australia was experiencing a boom in the mining and defence industries, the rationale of the government seemed to suggest that displaced workers would be able to move seamlessly from one industry to another.

As South Australian Premier Mike Rann at the time commented:  “When we saw Lonsdale close, we were able to find jobs for nearly all of the people who wanted jobs because of other things that were happening . . . A lot of people who build the actual hulls and things associated with the defence industry will be coming out of car industry jobs”.

A more effective long term policy would be to re-skill workers at the plant so they can produce defence technology at that facility. Why let the facilities and skilled labour go to waste? The money from the Federal government would be much better utilised by expanding or retooling the plant to accommodate defence technology. This would give the workers greater job security and job satisfaction.

The Federal Government is too far removed from the states and too concerned with its own problems to understand the problems at the regional level. A forward thinking local government should have requested a policy intervention as it seems ludicrous to let these skilled workers compete in the already overcrowded services industry especially at a time of critical skills shortages.

Furthermore, this strategy has work overseas. Force Protection Ltd was established in 1997 and has its base in South Carolina on a 260 acre campus that formerly produced General Electric turbine engines. Force Protection Ltd has expanded so rapidly that it now has four more facilities spread over three states and employs over 1000 people.

Andrew has a degree in Marketing and Commercial Law from the University of South Australia and is currently undertaking a graduate certificate in Sustainable Business.