Trade Liberalization and Lagged Reactions †Free Sample to Students

Question: Discuss about the Trade Liberalization and Lagged Reactions. Answer: Introduction: In this research, secondary data collection method is applied for attaining the reliable as well as accurate outcome. This information is gathered through the journal articles, books and websites, etc. this data collection method is quite effective, as it takes less time and cost for obtaining the facts and figures. Secondary data is highly incorporated in the literature review for the purpose of creating valid and reliable research. The car manufacturing sector of Australia had gone small after every company has started to depend on it for its survival. In the eco system of the automobile industry, most of the car part suppliers have contracted with around three brands to stay viable. Clibborn, Lansbury Wright (2016) mentions that employees left factory of Ford Broadmeadows. They were among the thousands, who are impacted by their previous job cuts and are moving towards the ongoing closure of the car manufacturing (Clibbor, Lansbury Wright, 2016). Factories require having economies of scale at the right time and letting alone at the worst time when they are expected to compete with the imported parts of low cost. The local Australian content has made cars manufacturing decline. Its noted that 30% of the parts are produced at the Holden Cruz, which was locally sourced, and it was also observed that Commodore was around 50% Australian, as per figures, which were supplied by the car makers (Sanidas Jayanthakumaran, 2007). Toyota has tried to create the Japanese image, but simultaneously Camry has 70% of the Australian car parts, which was similar to Ford Falcon. In case the car manufacturers had to survive more than the present models, they will be forced to depend on the foreign parts for reducing the cost. It means that saving the car manufacturers might have saved the other part supply industry, which is contrary to that, if save us, then you save them, which Holden used to mention in its arguments for supporting the government. Toyota, Ford, and Holden had always stayed in headlines, but hundreds of small car manufacturers supply the car parts for the massive brands were feeling, but not that much pain (Sanidas Jayanthakumaran, 2007). Thats why as soon as the first sell fall in the last year May for Ford, the decline of the lasting two manufacturers such as Toyota and Holden and other industries was inevitable. Akio Toyoda, who is the President of Toyota Motor Corporation, has announced that the organization will stop the manufacturing of cars in Australia in last four year, which bangs the nail in the countries auto industry coffin (Sekaran Bougie, 2013). The best practice of the car factories supports in producing less of 250000 vehicles each year. It is noted that in the end, three car brands of Australia combined can barely meet it. Taylor, Bogdan DeVault (2015) mentions that shut down of Mitsubishi in the year 2008, the automotive industry of Australia has become quite like the wobbly three legged chair. It is noted that once the Ford had lost, then the tipping point was imminent for Toyota and Holden, despite the posturing in public. The shutdown timing in the year 2016 was for Ford, and in 2017, Toyota and Holden were shutdowns, which were genuine, but it was also a convenient coincidence (Taylor, Bogdan DeVault 2015). Ford Falcon, Holden Commodore as well as Toyota Camry meet the end of the model cycles, before getting replaced by the new cars. It was quite common for the car manufacturers to shadow over one another, when other launches so that they can stay competitive with the help of fresh metal. Nevertheless, the three car factories in Australia and the hundreds of car parts suppliers have to struggle to move total distance from the proposed shutdown, when sales of the locally manufactured vehicles got a shrink (Walter Andersen, 2016). By next year, the manufacturers of the car like Toyota, Mitsubishi, Holden, and Ford have to exit the manufacturing work in Australia, by considering the assembly lines, in which production cost is quite less. They will also try to create the supply elements and accessories in automobile sector of Australia (Walter Andersen, 2016). But moving beyond the direct effect of the suppliers, the research has indicated that there will be the substantial effect on the outputs and thousands of job loss in both the upstream and downstream industries, and mainly the Professional, scientific and technical services. It is noted that this sector explains by the Australian Bureau of statistics, presently employs area around one million people, and it comes to around 8.5% of the total workforce (Walter Andersen, 2016). There are different reasons in the coming of the car manufacturing industry. The market of Australia is quite small, and the Australian industry falls in exploiting the economies of scale. To stay solvent, they hold no alternative, but instead of that, they make use of low-cost foreign production inputs, which includes both parts and labour (Walter Andersen, 2016). The conditions of the domestic market in Australia has gone untenable by reducing the import tariffs as well as through Free trade agreements; increased wages and better conditions of work, which is demanded by the unions in the company; and appreciation of the dollar in Australia. It is challenging to compete when the cost of labor in certain Asian countries are 1/4th of (Australia Collapse of Australian car manufacturing industry, 2016). Dowling (2017) mentions, that car manufacture industry fails in operation in isolation. In the year 2009-2010, there will be around 73772 full-time employees, working in the automotive sector, which also includes the transport equipment and parts production (Dowling, 2017). It is noted that the total gross input of the production as around $20 billion. The employment and output multipliers in the car manufacturing industry are two and seven, recommending that $1 million along with final demand, which can, directly and indirectly, $2 million extra output along with seven jobs within the economy (Dowling, 2017). Most importantly was that, the collapse of the automotive vehicle industry, which can adversely affect the PSTS industry viability. The industry also offers the architecture, scientific research, accounting, advertising market research, computer system designs, as well as management and various other consultancies, professional photography, and veterinary science (Keller, Aperia Georgson, 2013). In this sector, scientist includes the CSIRO employees, which mainly involve research and development activities. Relying on the extent of the sectoral linkages, there are many full-time jobs loss, which differs all across the industry. Assuming about the entire car industry closure, below figures show that the job loss takes place in the hit sectors (Keller, Aperia Georgson, 2013). Various employees were already employed in different sectors, but the information served to mention the different areas, which are affected. The above table depicts that the industries are most likely to get affected through the future research and development vacuum, which created the motor vehicle company absence. Various previous studs have explored that car manufacturers offer transferable skills, technical support, and employee training the parts (Daft Samson, 2014). These are the extensive spill overs knowledge coming from the automobile sector to other industries. Previous studies have shown that car manufacturing offer transferable skills, technical help, as well as employee training in small suppliers (Daft Samson, 2014). They hold extensive knowledge about the spill overs. In the year 2008, Steve Bricks had reviewed the Australian automobile industry. All these spill overs help in the contention that automobile sector is the significant element of both the equipment capability and machinery in Australia (Daft Samson, 2014). The outcome had indicated about the motor vehicle industry collapse, which can severely disturb the car manufacturing industry by developing the vacuum at both the upstream a swell as downstream sectors (Porter, 2016). The common outcome is also collected in the year 1998 as well as through 2012 industries, which recommends that research and elopement intensive manufacturing industries like the automotive sector play integral role in the technology diffusion process (Ciambrone, 2007). All these findings are consistent with the Bracks report agreement, which mentions that research and development are the linchpins of the automobile sector in Australia and there are crucial knowledge spill overs towards other industries (Earl, 2002). Ford has indicated that it will stay with its product development centre as well as testing facility after the factory is ceased for the manufacturing operations in the year 2006. Holden has mentioned that it will stay its international design studio after they have stopped the production in the year 2017 but has sailed in commenting over the product engineering work fate. Toyota mentions that there exists considerable minimizing the Australian design base for it (Hagon Hagon, 2016). Nevertheless, there are fears that Toyota, Holden, and Ford will remove the research and development activities closer towards the manufacturing centres after shutting the plants in Australia (Hagon Hagon, 2016). In specific, it fears that car elements of Australia car manufacturing industry will fail to survive and it is noted that its engineering capability will be impacted adversely. It views inevitably; about the automotive sector collapse in Australia will try to create the huge dent in the car ma nufacturing industry (Hagon Hagon, 2016). The future budget will reduce the company like CSIRO, which had only exacerbated the situations through reducing the research and development activities n the long term. It can be considered as a serious problem, especially when the motor vehicle industry coincides with the CSIRO by losing around 10% of their employees in the coming four years, due to the strong measures, which were introduced in the federal budget of 2014. By the absence of car manufacturing companies in Australia, the country requires having more, along with less investment in the area of technological innovation and research and development (Farmer, 2010). Otherwise, failure to have a lack of investment in these crucial areas will negatively create influence in the remaining industries survival, such as technology intensive industries (Keller, Aperia Georgson, 2011). That is not the one mentioned as flexible and innovative economy. References Ciambrone, D. F. (2007). Effective Transition from Design to Production. CRC Press Clibborn, S., Lansbury, R. D., Wright, C. F. (2016). Who Killed the Australian Automotive Industry: The Employers, Government or Trade Unions?.Economic Papers: A journal of applied economics and policy,35(1), 2-15. Collapse of Australian car manufacturing industry. (2016). Retrieved on 12th August 2017, from https://www.swinburne.edu.au/news/latest-news/2016/10/collapse-of-australian-car-manufacturing-industry-.php Daft, R. L., Samson, D. (2014). Fundamentals of Management: Asia Pacific Edition PDF. Cengage Learning Australia Dowling, J. (2017). Why Australian car manufacturing died and what it means for our motoring future. Retrieved on 12th August 2017, from https://www.adelaidenow.com.au/technology/why-australian-car-manufacturing-died-and-what-it-means-for-our-motoring-future/news-story/0428dc235d1b44639459959f5a3bbf9b Earl, P. E. (2002). Information, Opportunism and Economic Coordination. Edward Elgar Publishing Farmer, G. (2010). Great Ideas in Motion: A History of Chrysler in Australia 1946-1981. Ilinga Books Hagon, T., Hagon, W. (2016). Holden: Our Car 18562017. Pan Macmillan Australia Keller, K. L., Aperia, T., Georgson, M. (2011). Strategic Brand Management: A European Perspective. Financial Times/Prentice Hall Keller, K. L., Aperia, T., Georgson, M. (2013). Strategic Brand Management. Pearson Higher Ed Porter, I. (2016). What Happened to the Car Industry? Scribe Publications Sanidas, E., Jayanthakumaran, K. (2007). Trade liberalization and lagged reactions of trade flows, productivity and internal demand: an application to the Australian PMV industry.Journal of the Asia Pacific Economy,13(1), 26-49. Sekaran, U. Bougie, R. (2013). Research Methods for Business - A Skill Building Approach, 6th ed., West Sussex: Wiley. Taylor, S. J., Bogdan, R. DeVault, M. (2015).Introduction to qualitative research methods: A guidebook and resource. USA: John Wiley and Sons. Walter, M., Andersen, C. (2016). Indigenous Statistics: A Quantitative Research Methodology. UK: Routledge.