By Matt Siegel
GEELONG, Australia, March 6 (Reuters) – Behind closed doors
at City Hall, Geelong’s eccentric mayor sits searching for an
analogy to put into perspective the punishing job losses
battering his city.
Darryn Lyons runs his fingers through his blonde mohawk –
the man leading this Australian manufacturing hub was once a
paparazzo and reality TV star in Britain – before settling on a
way to describe how the departure of companies such as Alcoa Inc
and Ford Motor Co. will hurt.
“I relate it a little bit to the prehistoric age, really.
The dinosaurs have been going throughout the world for the last
seven or eight years,” he said, referring to the struggle to
adapt in the face of growing competition from Asia and then the
global financial crisis.
Geelong, 75 km (46 miles) south of Melbourne, is a microcosm
of the economic crossroads at which Australia stands. The steps
authorities and industry leaders take here – securing
next-generation defence contracts or incubating carbon fibre
production – will be closely watched to see if the city becomes
Australia’s Silicon Valley or its Detroit.
Australia largely avoided the turmoil of the global
financial crisis by leveraging Chinese demand for its abundant
natural resources. The mining boom, however, is slowing and a
high Australian dollar has helped drive its manufacturing base
overseas.
The announcement last month by U.S. aluminium producer Alcoa
that it would close its Point Henry smelter, putting 600 people
out of work, was just the latest in what Lyons has called a
“tsunami” of manufacturing job losses across the country.
Geelong, home to nearly 180,000 people, is now wrestling
with the question facing much of Australia: what happens when
there is neither a resources boom nor a substantial
manufacturing sector.
FACTORY GHOSTS
Alcoa’s hulking Point Henry smelter, located on a desolate
promontory crisscrossed by humming high-voltage cables, feels
haunted by the ghosts of manufacturing past.
Behind the plant lies the empty Moolap salt works. Across
the bay sits Avalon Airport, where national carrier Qantas
in November announced the closure of a maintenance
facility, shedding 300 jobs.
The decision last year by Ford to cease manufacturing in
Australia by 2016 will take 600 jobs from Geelong and, together
with similar moves by Toyota and General Motors
in other parts of the country, signalled the end of Australia’s
rich history of car manufacturing.
Alcoa’s decision to shut the 50-year-old smelter was taken
after a two-year review found no prospect of it becoming
financially viable. Australia was once one of the world’s
biggest aluminium producers, but has slipped to fifth place as
production costs climbed and prices dropped.
By some estimates, more than 10 percent of Geelong’s
population will be affected by the job losses, a fact made
evident by the empty shopfronts dotting the city and the “For
Sale” signs sprouting across its suburbs.
Adam Oates, 42, has worked at Point Henry for nearly his
entire adult life. His father and father-in-law worked for Ford,
he said in an interview at his home, and he always assumed he
would have the sort of job security they enjoyed.
Lately, he said, more and more locals have been comparing
Geelong to Detroit, the American city famous for the blight and
urban decay brought on by the crisis in its automobile industry.
“The community in Geelong is shattered,” Oates said.
“Nobody’s got an idea where we’re going, what we’re gonna do
next … the comparison to Detroit has been brought up a lot.”
“I reckon it’s gonna be a ghost town.”
“GIDDY UP”, SAYS MAYOR
Manufacturing has been declining in importance in Australia
for decades as successive governments rolled back trade barriers
and exposed firms to intense foreign competition.
With a population of just 23 million, Australia never had
the domestic scale to compete with industrial giants such as
China or Japan or match the low wages of other fast-growing
economies in Asia.
“We can’t compete with Thailand making cars. Fact. We’ve
known that for a long time. We can’t compete with South Korea
making TVs. We’ve known that for a long time,” Lyons said.
Lyons, 48, became mayor in November after a prominent media
career in Britain. His smiling visage now beams down from a
billboard on the side of the highway, greeting visitors to
Geelong with his slogan for revitalizing the city: “giddy up!”
Business interests initially opposed his candidacy, even
taking out advertisements in a local newspaper warning residents
against him. But his media profile and dedication to securing
investment in defence contracts and tourism have won Lyons many
admirers.
FROM SHEEP SHED TO CUTTING-EDGE RESEARCH
Where Australia does have a huge natural advantage is in
resources, making it the world’s second largest producer of iron
ore, gold, lead and zinc and the fourth largest for silver and
black coal. Massive investment in liquefied natural gas should
make it the biggest exporter by 2017.
Value-added products such as food, tourism and education are
seen as huge growth opportunities, as the investment phase of
the mining boom dies down over the next three years, leaving a
gaping hole in the national economy.
The ups and downs of Geelong’s economy have long mirrored
those of the country. It rose and fell in the 19th century on
booms in wool and gold, before transitioning into manufacturing
in the 20th century.
Jane den Hollander’s office at Deakin University in Geelong
is illustrative of that change – it started life as a sheep shed
and is now a part of the university’s Australian Future Fibres
Research and Innovation Centre.
The centre is a A$102 million research hub and home to a
pilot plant called Carbon Nexus that Deakin says is the world’s
first research plant capable of producing large scale amounts of
industrial and aerospace quality carbon fibre.
Hollander, Deakin’s vice rector, identified agriculture as a
short-term possibility for those without advanced skills in
Geelong before mooting education, health care and information
technology as sectors being promoted by the university.
“The longer term opportunities are these high-tech, IT,
light weighting, energy-saving type things that numbers of
companies are doing and can be exploited quite significantly,”
she said.
Touting Geelong’s manufacturing background, Lyons is
lobbying the Australian army to build its next generation combat
vehicle in the city.
The Land 400 is a A$10 billion project intended to produce a
suite of new armoured vehicles, which the army describes as the
largest, most expensive and most complex major capability
project in its history.
Competition between Australia’s states – especially those
such as South Australia and Victoria that have been hit with
major losses in manufacturing – is already fierce.
For Damian Young, a 39-year-old Alcoa worker, the project
feels like a case of too little, too late. A once certain future
for himself and his two young sons now seems anything but, he
says.
“It’s like going into a dark tunnel,” he said. “You don’t
know where it’s going to end.”
