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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2016-11-29 Daily Xml
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Automotive Industry

The Hon. G.E. GAGO (14:58): My question is to the Minister for Automotive Transformation. Can the minister inform the chamber how companies in northern Adelaide are working together to create jobs for automotive workers in Adelaide's north?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (14:59): I thank the honourable member for her question and her interest in northern Adelaide and making sure that there is continuing industry and jobs in that area. I recently had the opportunity to visit and see firsthand the great work that is happening at ZF Lemforder where we are not just helping automotive workers diversify into other sectors in our economy but we are also working with automotive supply chain companies to keep their businesses trading. At the end of next year some automotive companies will be closing; some will remain open and still produce automotive products, either for cars assembled overseas or for after-market use.

Other companies are looking to change what they do. We have companies looking to move into the health sector, medical devices and, in this case, we have a group of companies working together to move into the manufacture of buses. When Holden's closure was first announced, a majority of automotive companies at the time did not have plans to diversify. When our automotive task force first spoke to about 74 tier 1 and tier 2 companies, just under three years ago, four in five tier 1 companies thought that they would close their doors and had not considered diversifying.

Since that time we have been working hard to support these companies to look at their assets, both people and their skills and the equipment they have, and other paths that they could take instead of closing. I am now advised that about three in five tier 1 companies expect that they will continue to operate in one form or another. We have now supported 15 companies through the Automotive Supplier Diversification Program to begin this journey. I am told that we have supported almost half (35 out of the 74 of the supply chain companies) to access funds to help them through this diversification process.

One great example of this diversification is the collaboration between automotive supply chain company ZF Lemforder, part of the global ZF Group that provide Driveline and chassis technologies, and Precision Components, a component supplier in the body and chassis area here in South Australia. Also involved in this new enterprise is Transit Australia Group, the largest privately operated public transport operator in Queensland. It is also the only operator in Australia that has both bus design and bus manufacturing capabilities.

The state government has provided $2 million of financial assistance to an alliance between these three companies to manufacture four prototype buses in northern Adelaide for a trial within metropolitan Adelaide. The project proposes an integrated solution that offers the next generation electric as well as low-emission diesel vehicles. Once built, these buses will be seen on the roads of Adelaide and will provide the transport department with valuable information about how electric and low-carbon emission buses might be used in the future.

Early signs for this venture are very positive, with work already underway to fill an order from Queensland for 12 more of these buses. If the coming trials prove successful there is no reason that this project will not continue to grow, not only creating high-quality manufacturing jobs in Adelaide's north but also reducing carbon emissions at the same time. Many different components go into a bus and there is potential work for other (current) local automotive suppliers who are looking to diversify their production with this project.

The combined work of ZF Lemforder, Precision Components and the Transit Australia Group is a great display of an example in northern Adelaide showing the need to diversify and the innovation and collaboration needed to retain jobs in this sector. Projects like this show that there is a future for manufacturing in this state, and I look forward to seeing these new buses on the streets of Adelaide in the coming months and this project continuing to grow.

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