Victoria’s economy faces its darkest days since the Ansett collapse in 2001, with Alcoa expected to fast-track its decision to close its Geelong aluminium smelter days after Toyota announced it would end car production at Altona.
The future of SPC Ardmona’s fruit processing plant at Shepparton could also be decided by early next week, with the board of Coca-Cola Amatil meeting on Tuesday to discuss ”options” for the plant.
So let’s put that into perspective – Ansett went into voluntary administration just after 9-11 and ceased flying in March 2002. So with those dates in mind I had a look at some Victorian data from the ABS (the data I employ are seasonally adjusted). As it turns out the next version of this data set will come out later today – but I doubt the ABS will be revising data from 12 years ago.
Looking first at Victorian unemployment.
Now there are a lot of people who reckon the unemployment figures are dodgy – so I also had a look at (Victorian) aggregate hours worked.
Now it does look like there was a flat period around the time of the Ansett collapse – but that started in 1999. More likely flat economic activity (as measured by hours worked) contributed to the Ansett collapse rather than the other way around. Mind you the company had long-term financial problems.
The bottom line is that the collapse was very traumatic on a micro level for the various stakeholders but is hardly a blip in the long-term data.
There is, however, one very important parallel between the collapse of Ansett and the Toyota decision – as Mike Nahan explains:
As a former Ansett executive stated: ‘I can recall on many occasions speaking to staff and union leaders saying, “If we don’t change some work practices, this company is going to go down the drain.” They never, ever accepted that. They believed Ansett was a cash cow that could just be bled to death’.