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The Company A Global Presence Along With International Distribution

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Question:

How the presidency of Mr. Trump will effect on the business processes and the economic consequences due to it?

What is the work culture in the car industry of Australia and the USA, the differences and consequences on the work life of the managers?

What are the HR issues and related employee relationship issues affecting the work methods and work life, in the car industry of USA?

 

Answer:

Introduction

The company Toyota Motor Corporation Australia has the trading name of Toyota Australia, operating with the Luxury and budget cars. In Australia, the company deals with the domestic customer segments along with the international customers of the neighbouring countries. The company has a global presence along with international distribution and production channels (Toyota.com.au 2017).

The company was established in Australia in 1963 and the main production unit was set up in Victoria. In the year 2014, Toyota Australia announced to close down its manufacturing plant till the last of 2017, since the company was modifying their business structure as a national sales and distribution company over Australia.

The report discusses about the effects and consequences aroused due to this decision. Along with that, the effect of the presidency of Donald Trump and the economic fragmentations due to it are part of the discussion. The role of the HR department is the major part in the situation and it is focused in this report. Along with that, the issues among the employees and managers are also evaluated and recommendations made to resolve it.

 

Back Ground of study

The Altona plant is the biggest manufacturing unit of Toyota Motor Corporation in Australia operated in the suburb of Altona and near to Melbourne Port. The plant mainly produces the Camry and Aurion with the target market in Australia and the Middle East. Apart from that, the company offers the market with a large range of products and hence earns a huge turn over (Afr.com 2017).

The company has decided to relocate their manufacturing plant to a similar plan located in USA. According to a report by the Australian financial review, Toyota axed around 2600 jobs for this purpose and hence the workforce of the organization has faced a huge change and diversity. The HR managers are also facing various issues due to this and the employee management has become difficult for the top level management. Along with that, the presidency of Donald Trump is also affecting the financial status and approaches applied by the company to shift and expand over USA. Henceforth, the Human Resource department is facing both internal and external issues to handle and create a positive work environment for ultimate organizational growth (Reddon and Shuey 2015).

Presidency and Approaches of Donald Trump

The company Toyota Motor Corporation has planned to set up their new manufacturing unit in the city of California. The President Donald Trump has issued a threat against the Toyota Motor Corporation regarding the new plant development in the Baja California. The election of the president has affected the decision taken by the Toyota due to this purpose as this has appeared to be an obstacle of big border taxation for the exim of the cars and other necessities. The new president Donald Trump has imposed his decision over it as; Toyota Motor has to build their plant in US, not in Mexico, otherwise they have to pay huge border tax for the exports. The company has issued a statement in response assuring the US employment in the new production facility build up in Guanajuato.

The company Toyota is strategically collaborating with the administration services of Donald Trump to get competitive advantages in the business along with the ner manufacturing facilities. The main purpose behind this strategy is to serve the target customers with best of their services. The entire automotive industry will be influence due to this collaboration, if happen in US. However, in the conversation over the social media, the labour negotiation issues has come up and the company Toyota has yet not modifies their decision for the approaches of Donald Trump (Garcia 2017).

According to a report published by Heraldsun.com.au, the company Toyota Australia has announced the closure of the plant in the Australia as on 3rd of October in the year 2017. The decision is going to affect the family of 2600 workers. In the year 2016, Ford has similarly shut down their plant in Australia and that has majorly affected the employability status of the country (Heraldsun.com.au 2017).

According to the report by Reuters.com, the new president Donald Trump has targeted the largest automaker Toyota Motor Corp to stop the outsourcing of the workforce from Mexico. Trump want the unemployed people of US to get placed in the company Toyota, which is itself can be compared as a good decision for the country, but it is influencing the present economic situation of the Australia. The broader side of such incident can be resulted in the cross- border trading and the economic losses to Latin America As per the report, Mr. Trump is going to force more American automakers to build their production facilities in US to accommodate the employment status of US (Reuters.com 2017). In the report it is said, Toyota and other various automakers such as Ford has exported more than 1.1 million vehicles to US from Mexico. Thus, Trump is reconsidering the terms of the North American Free Trade Agreement as happened with General Motors Corp and the countries like Canada and Mexico. Trump has also criticized the General Motors for importing the Mexican made vehicles.

According to the report published by Usatoday.com, the decision of Donald Trump has accused the foreign automakers who use to make their vehicle in Mexico and export them to US, to pay 35% tariff for this purpose. The free trading agreement is going to be revised by the president to stop the market entry of the foreign exporter. The made in US strategy is adopted for developing the employment growth in the country. The Mexico plant has 2000 employees and the productivity is about 200000 vehicles. However, every foreign automaker is approaching the president for collaboration in this purpose and they are trying to get the more profit from market at any means. The strategy adopted by the companies targeting the new administration to shake hand in the development of the new business fairs among the country and the company. According to the report, the production unit in Guanajuato will focus on the production of Corolla cars and the old manufacturing unit of the Corolla cars will be reconstructing their manufacturing facilities (Usatoday.com 2017).

 

Australian Car industry

The country Australia is famous for manufacturing the designer large sized cars. For the same, several global companies have chosen Australia as a major part of their global production. The companies like Ford Motor, General Motor and Toyota has a century of operation in the country. However, at present few of the companies has closed and few of them are going to close their production units in Australia (Productivity Commission 2014).

In the past decades, the industry has employed above 50000 people in the automaker companies. The car industry has done huge investment in the economy of the country. There are several people whose life is dependent on the growth of the industry. According to a study, it is counted as up to $5 billion dollars of investment by the car manufacturing industry in the country. In the economy all the big vehicles and the small vehicles producers are participating and hence influencing the position of the country in the international market (Dechezleprêtre, Neumayer and Perkins 2015). The country itself has 64 automotive brands which are also exporting cars to other countries thus earning foreign currency for better economic growth of the country. The cross country trades affect the life of the employees working in those companies. However, labour cost in Australia is quite high rather than the neighbouring counties and hence it can be concluded that the employees working in the car industry is having sufficient resources for their family (Adelaidenow.com.au 2017).

According to the report, the assembly line workers in Thailand use to get paid more as $6 per hour rate and $12500 per year, whereas, the Australian Manufacturing workers use to get wage of $69000 per year. The reason behind such above average wage rates in Australia is concluded as the Free Trade Agreements among Australia and other countries regarding the import and export of the spare parts and the manufactured big sized cars.

According to the report by Federal Chamber of Automotive Industries, the automaker industry is contributing for last 70 years and hence supporting the families of the people who are working in various job roles such as manufacturing, retailing, sales, servicing and the repair and the logistics. The industry used to get an annual turnover of $160 billion and the government of the country is getting various numbers if taxes and again contributing for the development of the status of the people in the country. The industry uses to provide best ever technology for the safety of the workers during the production and other manufacturing procedures. Thus, the employees use to get secured workplace and hence assurances for future for their family. The organizations used to provide specialized professional training to their employees for developing the skills. However, the employees use to get support in education and growth from their companies (Fcai.com.au 2017).  

According to a report dealing with the present scenario of the industry, it is stated that, the biggest Australian manufacturing companies are shifting their production units since the labour cost is high in Australia and the other country’s labour market can provide the companies with low production costs. These approaches by the various car manufacturing companies are resulting in the huge fall in the economic conditions of Australia. Along with that, the job cuts are indicating towards the imbalance of the employment situation in the country. According to the Australian Bureau of Statistics, the industry currently employ around 8.5 % of the total workforce of the country which is going to be declined in near two or few more years. The report has focused on the import tariffs, Free Trade Agreements and the work conditions imposed by the trade unions (Swinburne.edu.au 2017).

 

US car Industry

According to the article published by Vault.com, there are about 253 million cars registered in the US and hence it reflects the usage of the cars in the country. However, the American has increased the use of the cars in last few decades and hence it has increased the growth of the car manufacturing industry in US (Lichtenstein 2013). Along with that, the people who are working in the US car companies, getting the best wage rates and they are having best work environment too. However, the industries in US use to face extensive competition not only among the companies but in the organizational people. This seems to the peer pressures hampering the work life balance of the employees in US (Moreno and Terwiesch 2015).

When discussing about the employment scenarios in the car manufacturing industry of US, it is necessary to state about the job availability. There are several types of jobs available in the industry and blue collar jobs are comparatively more paid relating to other countries. However, there are several trade unions controlling the workforce in the production units and hence arousing various labour issues among the worker which the HR managers use to face difficult for solving (Correcher et al 2017). There are basically two type of remuneration, hourly based which are considered for the union workers and the salary based which are considered for the nonunion workers. The industry is employing around 1.5 million people of the country and the management of the countries uses to face various labour issues such as strikes due to attrition rate, salary structures and the policies for employees’ benefits imposed by the organization (Vault.com 2017).

According to research it is seen that, the workers in US use to have less work life balance since they use to face huge work pressure in their organization. The US car industry use to have huge demand in the market and hence they put pressure in the production units. Thus, the work life balance of the workers get ruined. Apart from that, it is seen that, the employee satisfaction rate over the industries are less than the industries of other countries. However, in Australia, better employees’ satisfaction rate is seen due to less work pressure as compared with US.

 

Differences between the two industries

Comparing both the countries, it can be stated that, the workers of both of the countries use to get high wage rates and along with that, they use to get supports for various issues from the Organizations. In the country Australia, there is less demand than in the US, hence the automaker companies has more opportunities in US rather than Australia. However, the wage is higher in the country. Thus Toyota has taken the decision to shift to Mexico. The situation can ruin the life of the old employees of the production unit of Australia. However, it will put an economic effect on both the countries. There is a huge gape among the car industries of the two countries in the matter of employees’ satisfaction. The work satisfaction of the workers results in motivation and employees’ engagement in the work better. However, the excessive work pressure sometimes ruin the path of achieving goals.

Recommended HR strategies for the situation and issues

For the internal situation –

  1. The HR managers of Toyota need to handle the situation strategically and they also need to put some effective methods to help the old employees.
  2. For this purpose, the management can help them in new employment or help them in acquiring new jobs in other companies.
  3. Along with that, the company should help the old employees in further professional studies that, the employees can approach for better career.
  4. Due to expansion the company can face various employee relationship issues. Such issues should be handled with regular meetings and open conferences.

For the external situation –

  1. Since the company is going to expand, the further recruitment policies need to be modified.
  2. To handle the approaches of President Donald Trump, the company can approach for hiring work force from US as for international placements in their Mexican firm. This strategy will help in collaborating with the administrative services of Mr. Trump.
  3. To handle the diversity among the employees few skill development programs and team management training should be given.

Conclusion

The report has gone through the view of the car manufacturing industry of Australia and US. Along with that, the comparison and evaluation of the both industries are done in this report. The report concludes that, there are various issues and obstacles the HR managers of Toyota going to face, but there are few solutions too. The recommended strategies can help the managers and the organization in handling the situation as caused due to the approaches of President Donald Trump. However, the approaches are good for the people of US.

 

References

Adelaidenow.com.au. 2017. Why Australia's car industry died. [online] Available at: https://www.adelaidenow.com.au/technology/why-australian-car-manufacturing-died-and-what-it-means-for-our-motoring-future/news-story/0428dc235d1b44639459959f5a3bbf9b

Afr.com. 2017. Toyota will shut its car making plant in Melbourne on October 3. [online] Available at: https://www.afr.com/business/manufacturing/toyota-to-axe-2600-jobs-when-car-making-stops-on-october-3-20170131-gu2hmb

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Correcher, J.F., Alonso, M.T., Parreño, F. and Alvarez-Valdes, R., 2017. Solving a large multicontainer loading problem in the car manufacturing industry. Computers & Operations Research, 82, pp.139-152.

Dechezleprêtre, A., Neumayer, E. and Perkins, R., 2015. Environmental regulation and the cross-border diffusion of new technology: Evidence from automobile patents. Research Policy, 44(1), pp.244-257.

Fcai.com.au. 2017. Australian Automotive Industry. [online] Available at: https://www.fcai.com.au/library/publication/fcai6049_full_version_final_(2).pdf

Garcia, F. 2017. Donald Trump just threatened one of the world's biggest companies. [online] Independent.co.uk. Available at: https://www.independent.co.uk/news/world/americas/donald-trump-toyota-baja-california-plant-jobs-twitter-latest-a7511981.html

Heraldsun.com.au. 2017. ‘I have three kids and a wife to support’. [online] Available at: https://www.heraldsun.com.au/business/toyota-to-shut-down-altona-plant-with-thousands-of-job-losses/news-story/763b7e389d8977e7caa804e773726b6e

Lichtenstein, N., 2013. State of the union: A century of American labor. Princeton University Press.

Moreno, A. and Terwiesch, C., 2015. Pricing and production flexibility: An empirical analysis of the US automotive industry. Manufacturing & Service Operations Management, 17(4), pp.428-444.

Productivity Commission, 2014. Australia’s automotive manufacturing industry.

Reddon, J. and Shuey, K., 2015. Exploring the effects of manual labour in a Toyota manufacturing company on a production employee’s mental and physical health.

Reuters.com. 2017. Trump hits Toyota in latest broadside against carmakers and Mexico. [online] Available at: https://www.reuters.com/article/us-usa-trump-toyota-idUSKBN14P27S?type=companyNews

Swinburne.edu.au. 2017. Collapse of Australian car manufacturing industry | Swinburne news. [online] Available at: https://www.swinburne.edu.au/news/latest-news/2016/10/collapse-of-australian-car-manufacturing-industry-.php

Toyota.com.au. 2017. Toyota About The Company. [online] Available at: https://www.toyota.com.au/toyota/company

Toyota.com.au. 2017. Toyota Key Facts. [online] Available at: https://www.toyota.com.au/toyota/company/key-facts

Toyota.com.au. 2017. Toyota Operations. [online] Available at: https://www.toyota.com.au/toyota/company/operations

Usatoday.com. 2017. Trump attacks Toyota for expanding in Mexico to sell in U.S.. [online] Available at: https://www.usatoday.com/story/money/cars/2017/01/05/donald-trump-toyota-manufacturing-mexico-jobs-nafta/96205464/

Usatoday.com. 2017. Trump attacks Toyota for expanding in Mexico to sell in U.S.. [online] Available at: https://www.usatoday.com/story/money/cars/2017/01/05/donald-trump-toyota-manufacturing-mexico-jobs-nafta/96205464/

Vault.com. 2017. Automotive Manufacturing|Vault.com. [online] Available at: https://www.vault.com/industries-professions/industries/automotive-manufacturing.aspx

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